REITs as a trade-war safe haven
REITs have done quite in recent weeks amid news of escalating trade tensions. I suspect this is because they could be viewed as a shelter. It remains entirely unclear if anything substantive will come of the negotiations and I mean that in both directions. It is plausible a favorable deal will be negotiated and it is also possible that a real trade war erupts which would likely hurt all parties involved. Thus, while the trade negotiations are neither bad nor good fundamentally for the broader market it creates significant uncertainty.
People do not like uncertainty.
This is causing funds to flow away from investments in the industries that are sensitive to either imports or exports and with few safe places to park, some of this capital is ending up in REITs.
Keep in mind that this is only good for the prices of REITs as it has little to no impact on REIT fundamentals. These fund flows represent yet another source of mispricing in this volatile market and we intend to take full advantage. If any of the REITs in 2CHYP are incidentally carried up to fair value, we will be happy to swap it out for one of the many other opportunities presently available.
2CHYP 2 year anniversary
Next week represents the last week of trading in the 2nd quarter of 2018 at which time 2CHYP will have been around for 2 full years. This provides an opportune time to do some analytics and following is the information subscribers can anticipate around the close of the quarter:
- Fresh company profile sheets on each of 2CHYP’s holdings updated for the latest information
- Portfolio analytics including dividend yield, payout ratio, and FFO multiples.
- A performance summary relative to the benchmark.