Here's a statement of the obvious: The opinions expressed here are those of the participants, not those of the Mutual Fund Observer. We cannot vouch for the accuracy or appropriateness of any of it, though we do encourage civility and good humor.
Moreover, REITs often move in a different direction from stocks or bonds. In the past three decades, REITs’ rolling 36-month correlation with other stocks—a measure of whether their returns moved independently of one another, or in tandem—has ranged from 0.89 to negative 0.16, says Mr. Ferri. A value of 1 would mean that they moved in perfect lock step, whereas a negative value means stocks rose when REITs fell and vice versa.
Over the same period, the correlation between REITs and Treasurys ranged from 0.74 to negative 0.66.
In 2008 REITs lost over 30% while the broader equity indexes lost in the same magnitude. So it still carries downside risk in severe drawdown periods.
Comments