“Real Estate Rest Day”… quick and easy for a Sunday.
Real Estate Companies and Exchange Traded Funds
There is a list of Real Estate ETFS here:
http://etf.stock-encyclopedia.com/category/real-estate-etfs-reits.html
The ones with a Canadian or UK flag next to them are traded on those non-US exchanges.
I’ve got a couple of “homebuilder” ETFs along with several Real Estate general ETFs on this chart. This is a 5 year chart with weekly tick marks, so will move a bit more slowly than most. Clearly after the crash, real estate is recovering.
Real Estate and Homebuilder ETFs
ITB - Homebuilder ETF GRI - Cohen & Steers Global Realty Majors ETF XHB - Homebuilder ETF FTY - iShares FTSE NAREIT Real Estate 50 Index Fund REZ - iShares FTSE NAREIT Residential Index Fund RTL - iShares FTSE NAREIT Retail Index Fund VNQ - Vanguard REIT ETF SCHH - Schwab U.S. REIT ETF - new
Clearly after the crash, Real Estate is in a nice recovery. The part near us in time is also in a nice uptrend. Looks like time to be in Real Estate. In future versions of this posting I’ll look inside some of those ETFs to see just exactly what they hold. Until then, you can explore them yourself at finance.yahoo via the “holdings” option. For example:
http://finance.yahoo.com/q/hl?s=SCHH+Holdings
shows it holding a nice mix of REITS:
Top 10 Holdings (49.6% of Total Assets) Company Symbol % Assets Simon Property Group, Inc. Comm SPG 11.42 Public Storage Common Stock PSA 5.21 Equity Residential Common Share EQR 4.93 ProLogis, Inc. Common Stock PLD 4.42 Ventas, Inc. Common Stock VTR 4.40 HCP, Inc. Common Stock HCP 4.28 Vornado Realty Trust Common Sto VNO 4.15 Boston Properties, Inc. Common BXP 4.09 AvalonBay Communities, Inc. Com AVB 3.60 Host Hotels & Resorts, Inc. Com HST 3.10 Get Quotes for Top 10 Holdings
One could then plot them on a chart at BigCharts.com and pick out particular favorites, check dividend levels of each, and Funds From Operations (that tells you if they can support that dividend).
Here is the 1 year daily tick mark chart of that first set of tickers:
Real Estate ETFs, 1 year daily tickmark chart
A very nice “buy the dips” look to it. So “RSI near 50” or “MACD near zero, red to blue on top crossover” (or swap to using slow stochastic to time the trades).
The same chart at BigCharts with Slow Stochastic, volume, and Momentum
You can see how buying the bottoms of those momentum downturns and selling the tops times a trade nicely in an uptrending ticker.
REITS
This is my usual “REITs Race” set of tickers. Just below it I’ve put the “top 10” from the SCHH ticker above.
REITS Race
PEI Pennsylvania Real Estate - Mall REIT VTR Ventas - sr. care, nursing homes, hospitals PSA Public Storage - junk storage units BXP Boston Properties - office REIT on BosWash corridor HCN Health Care REIT - extended care, senior care, medical offices HCP Health Care Properties - ex. care, senior living, Dr. offices PCL Plum Creek Timber - lumber and trees REIT SPY S & P 500 broad stock market benchmark RPT Ramco Mall REIT PLD Prologis - logistics
SCHH Top Ten Holdings
The tickers not already listed above are:
EQR - Equity Residential AVB - Avalon Bay Communities - a residential / apartment group. HST - Host motel and resorts. Was "Host Marriott" at one time.
In Conclusion
Looks like a nice recovery / rise in real estate going on. Fed handing out nearly free money, it makes sense. “Buy the dips” and watch out for “failure to advance”.
Musings from the Chiefio 
I would look at things that specialize in regions, not in national trends. For example, I have a feeling that Indiana will become hot for commercial and industrial property. Residential activity will pick up in North Dakota, Wyoming, Utah, and maybe Western Colorado. Texas is hot. Any other states adopting some of the tort reforms Texas has recently adopted will become “hot” as well. I would avoid California in all sectors until the state regains its sanity. Plays on open farmland will do well. Overall the residential market is going to be hard hit except in certain areas for certain reasons. The residential plays I mentioned above are due to local population booms driven by the energy industry where current housing availability is outstripped by people moving into the areas for work in the energy field. Indiana is due to recent labor laws that make it a favorable place to expand business or to locate business from neighboring states.
Louisiana may be another commercial play that should begin to heat up now that a lot of the corruption at the state level is being cleaned up. But the overall point is that there is some money to be made on local plays for local reasons. Overall the real estate market is screwed for about the next 20 to 30 years as the boomers move out of their last home and the generation moving into the housing market can’t afford to buy one because their student loan payments eat up what cash that age group traditionally put toward their first mortgage payment.
@E.M. Why not looking at the growing economies all over the world?, there is where the opportunity is: Where there is not, yet, an economy with real international prices; you go there, buy and just wait a few years, say two or three years, and get more than a 100% revenue.
Interesting.
I don’t remember you mentioning clientalism. Interesting concept, especially as he applies to our states:
http://ricochet.com/main-feed/Can-the-American-Currency-Union-Survive
@Larrygeiger:
I didn’t mention it. Had not heard the term before. It’s a useful one! Thanks!
@George:
I’d rather go regional too, but it takes time to find regional ETFs and stocks. If you know of some, post the tickers!
Until then, I’m willing to depend on the REIT managers to do some of the regional balance.
@Adolfo:
Well I DO look at international. But my trades are limited by what can be traded on a US market.
FWIW I owned part of an Argentine Shopping Center for a while. Lost on it… ;-)
The simple fact is that as bad as the USA is, it is one of the safer places to invest. Other places are more volatile, and they usually “all go together when they go”. So when SPY drops, EWZ and FXI tend to plunge. Look at CH Chile here compared to QQQQ nasdaq 100 and RUT Russel 2000 US stocks and you will see that the investment can disconnect from the desirability of the place.
I also like that Utah has approved gold and silver US Coins as currency ;-)
One of the responders mentioned farmland. What is the best index to track farmland, as distinct from commercial, industrial, residential?
@Hillrj:
There are not a lot of direct ETFs or REITS in farmland. (Farming companies, yes…)
There are a couple in China (that can be volatile). FEED, HOGS, GRO
A “Global Agribusiness small cap” is CROP
There is a “Timber REIT”. PCL
There are a few Ag ETFs that hold a mix of ag companies: COW MOO PAGG
There are ETFs that hold futures on commodities: FUD, JJG, BAL, JO, SGG, etc.
And there’s a Brazilian sugar farmer with land the size of West Germany: CZZ
but all of them have some “indirection” in the land price.
Oh, and various “Farms” for things like growing hogs, chickens, and even Dole Foods.
CVGW, FDP, DOLE, GRIF, SEED, CALM, SAFM, HRL, TSN
and many more listed here:
http://bigcharts.marketwatch.com/industry/bigcharts-com/stocklist.asp?symb=DJUSFP
http://agroreit.com/companies.html
PCH and WY are large land owners in timber and paper products.
At Seeking Alpha they have an article that talks about an Ag Index, but I can’t find the ticker that reports it:
http://seekingalpha.com/article/321571-rural-mainstreet-index-reaches-5-year-high
But I usually don’t follow indexes that you can not trade. What’s the point of knowing farmland is going up if I have to drive to Nebraska and buy a farm to use that info?…
It looks like a lot of folks report it:
https://duckduckgo.com/?q=rural+mainstreet+index+2012
but I didn’t see a public portal, so it may be a report you need to purchase…
These folks look like they have a lot, but require you log in to get it:
http://www.farmlandinvestorcenter.com/land-value-surveys
That’s about all I can do in a short bit of “Web Foo” ;-)
You are quite correct about the lack of public stock position in farming. Contrary to popular opinion about Giant Corporate take over of farming it ain’t so. Most corporate farms are larger family farms that have incorporated to protect the assets from taxman greed. It takes generations to accumulate the assets for a farm that one bad event can wipe out. No real investor would risk his wealth on the very low ROI of farming. There are periods when farming can give high returns but these are rare and you have to be in the right place at the right time and KNOW what you are doing. Farming is a good place to accumulate wealth in land that at times can increase in value quickly but be careful of the taxman as the land is heavily targeted by local governments. I’ve been in farming for near 60 years and it is a fun thing to do BUT a very poor place to make money if that is what you want to do. Far better to farm the farmers with investments in farm supply and services. When farmers make money they spend or it in the farm operation. pg
Pingback: WSW, Sunday, 20 May 2012 | Musings from the Chiefio