Comments on: Blame Canada http://www.tasgall.com/2006/11/01/blame-canada/ Peering into the Cauldron of the Gods... Wed, 28 Sep 2011 10:20:57 +0000 hourly 1 http://wordpress.org/?v=3.3.1 By: Jason G. http://www.tasgall.com/2006/11/01/blame-canada/comment-page-1/#comment-227 Jason G. Sat, 04 Nov 2006 16:09:18 +0000 http://www.tasgall.com/2006/11/01/blame-canada/#comment-227 Actually REITs are not included in the Canadian Trust tax changes... if anything, REITs should look more attractive now, especially for yield-hungry investors who just got burned in Canadian Trusts. The two day correction in REITs looks like it really came from earnings results for some of the biggest REITs - AIV (down 9%), CLI (down 8%), and EQR (down 10%). Earnings were not as spectacular as everyone wanted, and the rest of the REITs sold off in sympathy. With such a pretty uptrend in REITs and REIT indexes, a lot of hot, fast money has piled in and is not shy about jumping out at the first sign of a price decline. The really hot money was most visible in some closed-end funds like IGR which was down 7% on Friday alone. The REITs are vulnerable to very fast down moves... back in April 2004 the entire DJR index dropped 20% in 30 trading days, with about 12% lost in the first week of the downturn. After the downturn was over, the index started marching steadily upward again, to go from 165 in May 04 to 305 on Wednesday this week. Actually REITs are not included in the Canadian Trust tax changes… if anything, REITs should look more attractive now, especially for yield-hungry investors who just got burned in Canadian Trusts.

The two day correction in REITs looks like it really came from earnings results for some of the biggest REITs – AIV (down 9%), CLI (down 8%), and EQR (down 10%). Earnings were not as spectacular as everyone wanted, and the rest of the REITs sold off in sympathy.

With such a pretty uptrend in REITs and REIT indexes, a lot of hot, fast money has piled in and is not shy about jumping out at the first sign of a price decline.

The really hot money was most visible in some closed-end funds like IGR which was down 7% on Friday alone.

The REITs are vulnerable to very fast down moves… back in April 2004 the entire DJR index dropped 20% in 30 trading days, with about 12% lost in the first week of the downturn. After the downturn was over, the index started marching steadily upward again, to go from 165 in May 04 to 305 on Wednesday this week.

]]> By: John http://www.tasgall.com/2006/11/01/blame-canada/comment-page-1/#comment-226 John Sat, 04 Nov 2006 13:35:09 +0000 http://www.tasgall.com/2006/11/01/blame-canada/#comment-226 REIT indexes have definitely reacted to this news, but I'm still looking kinda silly calling for a significant downward movement on REIT performance back in August. Doh! REIT indexes have definitely reacted to this news, but I’m still looking kinda silly calling for a significant downward movement on REIT performance back in August. Doh!

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