Hedge Fund
Serenity Alternative Investments Blog - August REIT Recap: When Will Then Be Now?
September 2020
Serenity Alternative Investments Blog - August REIT Recap: When Will Then Be Now?
- PERFORMANCE – Serenity Alternatives Fund I returned +0.77% in August bringing YTD returns to +5.1%. The FTSE NAREIT All Equity REITs index returned +0.14% bringing YTD returns to -9.87%.
- NEAR-TERM HEADFAKE? – Lodging and Regional Malls led REITs in August, while Warehouse and Infrastructure stocks lagged. Is this the beginning of a sustained move higher for risk-on sectors?
- LONG-TERM OPPORTUNITY – More evidence continues to accumulate that REITs could be on the cusp of a multi-year bull market. Patience, however, remains paramount.
Investors are not a patient bunch. We want the next big move in the market, and we want it now. Unless that move goes against our positioning. Then we want time to stop and think…to reassess the environment so that we can get to the right answer.
Unfortunately, the market rarely cooperates. As the old axiom goes…the market inflicts the most pain, on the most people, the majority of the time. This is why investors need to be vigilant, form a plan, and be ready to react when the market moves in an unexpected direction.
Right now, REIT investors are flexing their critical thinking muscles, trying to decide if they need to adjust their plan. Is the recent rally in hyper-cyclical Lodging and Mall REITs sustainable or not? Are investors simply taking profits in sectors that have had excellent performance year to date, or covering shorts in beaten down names? Or are we on the cusp of a longer-term shift in REIT sector performance?
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