Tags: Surprising | Top Investment | REITs | Real Estate

Surprising Top Investment in 2014: REITs

By    |   Friday, 13 June 2014 09:14 PM EDT

Forget the stock market and bonds. The hottest U.S. investments in 2014 have been real-estate investment trusts (REITs).

The benchmark MSCI REIT index was up 15.89 percent year-to-date as of late Friday, even after losing a little ground during the past week. That easily wallops the S&P 500’s rise of about 5 percent thus far in 2014, and most bond funds.

In fact, REITs have reversed course since last year. In 2013, the REIT index inched up only 2.5 percent while stocks surged more than 28 percent.

Editor’s Note: Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now

However, waiting for a REIT pullback might be the most prudent course at this point, based on the views of some analysts.

Portfolio manager Kevin Caron of Stifel's Washington Crossing Advisors told the Talking Number blog he does not believe the MSCI REIT index is a timely investment at current valuation levels.

But Caron said it should still be in a portfolio for strategic reasons. "It's a good diversifier for a portfolio," he said Caron.

"An average spread might be 100 basis points over Treasurys," Caron said. "Right now, we're about 50 basis points over. So, there's not a lot of meat on the bone for investors as far as yield is concerned."

Ari Wald, head of technical analysis at Oppenheimer & Co., said he is neutral on the MSCI REIT index.

"There are some REIT stocks that we like a lot [and] there are some REIT stocks we don't like a lot," Wald said.

"If you're looking to trade it, you can buy it here," Wald said. "I'm just a little unsure about the upside potential."

In a Barron’s guest piece, Ladenburg Thalmann recommended buying five REITS that it said are positioned for growth — Gramercy Property Trust, Stag Industrial, Spirit Realty Capital, EPR Properties and W.P. Carey.

In particular, Ladenburg Thalmann remains enthusiastic about single tenant net lease (STNL) REITs. The investment bank said STNLs are “seeing ample acquisition and build-to-suit (BTS) opportunities at still healthy spreads versus their historical cost of capital. We continue to view this as a key advantage for STNL REITs versus their multi-tenanted REIT cousins in the retail, office and industrial REIT sectors.”

Zacks was also positive about REITs in a new analysis. “Proving their mettle, REITs are again performing better than other stocks — a feature that makes their addition to your portfolio a strategic one.

“Even if increase(s) in interest rates hold back the industry's growth, economic betterment will lead to improved disposable income, higher occupancy levels and rent, rise in property valuation, and finally improvement in total income and dividend level,” Zacks predicted.

Editor’s Note: Dow Predicted Will Hit 60,000 — Buy These 4 Stocks Now

© 2024 Newsmax Finance. All rights reserved.


StreetTalk
Forget the stock market and bonds. The hottest U.S. investments in 2014 have been Real Estate Investment Trusts (REITs).
Surprising, Top Investment, REITs, Real Estate
452
2014-14-13
Friday, 13 June 2014 09:14 PM
Newsmax Media, Inc.

Sign up for Newsmax’s Daily Newsletter

Receive breaking news and original analysis - sent right to your inbox.

(Optional for Local News)
Privacy: We never share your email address.
Join the Newsmax Community
Read and Post Comments
Please review Community Guidelines before posting a comment.
 
Get Newsmax Text Alerts
TOP

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved
NEWSMAX.COM
MONEYNEWS.COM
© Newsmax Media, Inc.
All Rights Reserved