REITS - Buying 1 - 2 weeks before going ex-dividend Message Board

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Strategies & Market Trends : REITS - Buying 1 - 2 weeks before going ex-dividend

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To: bob wallace who wrote (2360)	2/1/2003 1:39:28 PM
From: Richard Barron	Read Replies (1) of 2561

Bob, Welcome to the board. I think SI reopened this board at some point. It had switched from dividend plays, to short term trading of REITs and a lot of people asking for longer term views. CARS HCP SHU WRI AIV ANL VNO PCL PLD DRE NHP ASN AML CPV HME HR SPG CRE HIW IRT MAC REG TCT PEI are some REITs that usually pay dividends to shareholders in February. Look at the charts and see if any of these have strong support and are trading near those support levels. The important date is the ex-dividend date, which is 3 business days before the date of record. The person who owns the shares at the end of that date is the one who will collect the dividend in a few weeks according to the payment date. The strategy is to find REITs that have solid fundamentals and a fairly tight trading range. If 2-3 weeks before the dividend the REIT is trading near the low end of the range, it will usually provide a 2-3% return if you have a deep discount broker and are investing $3000 or more and only paying $10 each way. Currently fundamentals are slowly deteriorating for most REITs and the ^RMS (Morgan Stanley REIT Index) is trading below it's 200 day moving average. This combination means that only very sharp traders who move in and out quickly are likely to make money. Investors with a longer time frame may be taking risks. The wise trader will get out with a 2-3% loss at most, if the trade starts to work against them. The most important thing is to buy near support ( a price where buyers seem to always step up) just before the dividend and have a sell stop 1% below the support, so your short term trade doesn't become a long term investment. If a REIT has dropped to a new low, it is almost always unwise to try and predict where the bottom is. Richard p.s. I used to watch the market 60 hours a week, but am down to 3-4 hours a week now, so I don't have the same feel for the trends. The patterns can be back-tested, so apply your own bells and whistles to the theory to see how it works for you. Best of luck

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