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Strategies & Market Trends : Bear!
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To: Worswick who wrote (56)5/4/1998 6:49:00 PM
From: James Clarke  Read Replies (1) of 271
 
Skepticism is always welcome. Thats the way to avoid mistakes. Will REITS fall with the market? A few points:

1. The last few little corrections saw REITS hang tough or even go up as the "smart money" fled to a safe haven.
2. As long as the real estate cycle is still OK (we've got at least another year to 18 months worst case), how much is a 7% yielding stock going to drop?
3. The caveat is a big interest rate spike. A safe 7% yield won't look so great if the long bond yields 8%. In this case, REITs would drop, but I think the rest of the market would still drop much more.

If you're looking for total safety, stay in a money market fund. I do not mean that facetiously. I have close to 50% of my investments in cash.

Jim
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