Investing Real Estate

REITs

2017 has been a choppy year for REITs to say the least. Barring a true Santa Claus rally, it is going to end up being a lackluster year for REIT returns. Overall, breadth remains decently healthy (more stocks are advancing than declining) and in an uptrend. However, the price trend is much more uncertain as more stocks are trading below their 50- and 200-day moving averages than are trading above.  The good news is there hasn’t been a major break in trend, suggesting 2017 could have been a consolidation period before the group decides which direction to go from here (up or down).

Although REIT returns weren’t robust this year, the group continues to offer good diversification benefits versus traditional equity indices such as the S&P 500 and Russell 2000. Assuming this relationship continues to hold, REITs are an important diversifier for nearly every portfolio.