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At 05:19 PM 2/13/99 -0800, you wrote:
.......
> I think the Real Estate Investment Trusts (REITs) fit the bill here.
>They have been in a down trend for over a year and their average yield is
>now around 8% which is much higher than the money markets. If interest
>rates hold steady or drop during the year (which I think will happen), then
>the REITs have to be close to their bottom on a yield basis. Therefore, the
>downside risk should be small. On the upside, real estate values and rents
>are on the rise. That should help the REITs earnings and the analysts are
>expecting about 7% growth for the REITs this year. If we can get a 8% yield
>and 7% growth, that means about a 15% annual gain. That's much better than
>sitting in a money fund considering there is only a small additional risk,
>but I don't want to over expose myself to REITs either. The answer for me
>is to invest about 20% of my portfolio in REITs.
>
>JimG
>
>
>
Jim --
Seems to me I heard something about Clinton's new budget proposals
containing some significant changes in REIT tax treatment that would remove
(of course) some of their tax-advantaged status and thus lower profits. I
don't recall any details, but you might want to look at that issue.
I do keep data of the REIT index (RIX), and I've attached a simple chart.
Best regards --
Chuck Engstrom
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