Hedge Fund
Serenity Alternative Investments Blog - REIT Opportunity: Preparing For The Next Bull Market
August 2020
Serenity Alternative Investments Blog - REIT Opportunity: Preparing For The Next Bull Market
I. From 2010 to 2016 REITs returned 14.6% on an annualized basis, outperforming all asset classes in 5 out of those 6 years.
II. Falling credit spreads and accelerating economic growth drove REIT NAV’s higher by 15% per year over this period.
III. While fundamentals are still slowing, a dovish federal reserve has set the stage for another extended bull market in REITs once economic growth returns.
“When should I own REITs?”
That question is easily in the top 5 list of frequently asked questions when running a REIT hedge fund. Frankly, it is a HARD question. When should you own stocks? When should you own bonds? Market timing is notoriously difficult…which is why the received orthodoxy is you should ALWAYS own those two asset classes in some form or another.
So it’s tempting to equivocate, and say that REITs should always occupy a place in your asset allocation. Simple, easy, straightforward, and semi-justifiable.
That is just not that exciting, though. Can’t we do better than ALWAYS?
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