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Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?


To: Jack T. Pearson who wrote (49233)5/3/2000 3:26:00 PM
From: pater tenebrarum  Read Replies (1) | Respond to of 99985
 
Jack, the problem with REITs is their reliance on debt and the fact that the real estate market has been so extremely hot. rising rates are generally bad for the sector.
the inflation hedges i'm in are mainly gold stocks, but also some selected oil stocks.

regards,

hb



To: Jack T. Pearson who wrote (49233)5/3/2000 3:28:00 PM
From: Joan Osland Graffius  Read Replies (1) | Respond to of 99985
 
Jack, >>I would think REITs would be a good inflation hedge.

IMO, the best time to buy reits is when real-estate asset prices are low and the rents have tanked. The last time I bought reits was during the RTC crises. We will get another shot at these at much lower prices.

joan



To: Jack T. Pearson who wrote (49233)5/3/2000 5:38:00 PM
From: Benkea  Read Replies (1) | Respond to of 99985
 
"I would think REITs would be a good inflation hedge."

You'd be right. First, rent increases are almost always inflation indexed. Second, many are quite leveraged so the value of the properties rise while the value of the debt remains the same (actually becomes less in real terms).

Look out for REITs with a high weighting in variable rate debt though.