Investing

is it a good time to buy REITs right now?

  • Last Updated:
  • Jul 20th, 2012 4:05 pm
Tags:
None
[OP]
Newbie
Mar 3, 2012
85 posts
3 upvotes
Montreal

is it a good time to buy REITs right now?

is it a good time to buy REITs right now?

most of them are at their alltime highs.............
16 replies
Deal Fanatic
Jul 30, 2003
5460 posts
372 upvotes
Toronto
You asking a general deal-searching public to perdict future? or most-likely outcome for future of Real Estate?

There is a 900 page and 100 page thread on perdiction of real estate (in Canada).

Bottom line: No one knows. Too many variables, will europe break? will china have a "soft landnig"? Can India debt / inflation is too much? Is mortgage CMHC risking too much? is personal debt too much in Canada? ... there are probably 1000 other things that may effect Real Estate in Canada.

---------------
What you want to do is - Can you take risk with REIT? What if they loose 10? 30? 50%? in value. What will your action be.

Search COUCH POTATO theory. Implement that - you be set for life.
For Sale:
  • DSLR Slider
Deal Fanatic
User avatar
Jun 26, 2005
9540 posts
1562 upvotes
Toronto
yes it is. You are a little late, but not too late. I suggest RioCan (REI.un) or REF.un doing amazingly well and with dividends too. I have REI.UN for a few months now
Deal Addict
Oct 4, 2009
2501 posts
1292 upvotes
Montreal
kindheartedguy wrote:
Jul 17th, 2012 3:30 pm
is it a good time to buy REITs right now?

most of them are at their alltime highs.............
You already answered your own question. Hard to think of a worse time to invest in REITs than right now.
Deal Addict
Jul 23, 2007
3824 posts
1634 upvotes
Not predicting anything, but if we do eventually get high inflation, REIT's "may" look like a good investment going forward. My own allocation to REIT's is only 5% of an RRSP.
Deal Addict
May 31, 2007
4996 posts
2111 upvotes
+1 I don't see any value in reit right now. There has been a flight to yield by investors because of the underperforming markets. Same can be said for a few other dividend or yield gems.

I think the time to by reit or Riocan was a couple of years ago.

Also reit are different then company stock so the valuation methods are a different.
Member
User avatar
Nov 28, 2002
408 posts
7 upvotes
Does it make sense with your portfolio? Is my crystal ball shinier than yours? Lol.

IMO no. The simple reason is as you said near or at all time highs which means more likely to correct than continue a straight line higher. Also the real estate market is weak in many parts of the country (certainly not all) which is not good for REITs. Thirdly, investors are chasing yields and inflating prices beyond fundamentals which of course ties back to point one.

However, looking at other segments of the markets you will be hard pressed to find one that is a good investment right now so owning something that pays you to own it (REIT) is better than the alternative.
Deal Addict
Jul 22, 2008
3854 posts
373 upvotes
Agriculture and materials, done. You don't want REITs b/c they are PRICE TAKERS. Most of them cannot increase rent substantially more than inflation. Plus, with the Canadian housing market fluctuations, there might be a lot of people waiting on the sidelines (like myself) who have money saved up but waiting for the prices to decline a bit more before becoming a home owner. I think the days of high rental occupancy/utilization will drop in the next couple of years.
Deal Addict
Jul 22, 2008
3854 posts
373 upvotes
Recommendations include: MOS/AGU, ORCL, BTU/TCK.B, TEVA, VLO, and RES. In an inflationary market, you want to own stocks that ARE NOT price takers (i.e. entities that have price setting power and low demand elasticity). Short stocks like GG, K, YRI, ABX, AEM, EGO, and overvalued internet stocks w/ low or negative earnings (ZNGA, GRPN, P)
Deal Fanatic
User avatar
Jun 19, 2009
5725 posts
1578 upvotes
Scarborough
FiNaL WaR wrote:
Jul 19th, 2012 11:10 am
zre.to has new all time high today too.

damn was looking to buy some
lol I bought it last month at 25.58 :D
Deal Addict
Jul 23, 2007
3824 posts
1634 upvotes
If you're concerned about REIT ETF's being too expensive right now, you can diversify away your risk in this asset class, by doing something simple like buying the iShares XIC - S&P/TSX Capped Composite Index Fund. I just checked and almost, but not quite 3% of that ETF contains Canadian REIT's.
Member
User avatar
Nov 28, 2002
408 posts
7 upvotes
Stryker wrote:
Jul 19th, 2012 3:25 pm
If you're concerned about REIT ETF's being too expensive right now, you can diversify away your risk in this asset class, by doing something simple like buying the iShares XIC - S&P/TSX Capped Composite Index Fund. I just checked and almost, but not quite 3% of that ETF contains Canadian REIT's.
3%? What's the point... and then he'd have to worry about his what 50% exposure to materials and energy.

Top