# To the Moon: REITs Rocket Higher with Rates on the Decline
At the day’s end, REITs catapulted higher, crushing the competition as they surged ahead. Today’s clear lesson? Investors, typically wary of owning REITs during rate hikes, now clamor for a piece of the pie as rates plummet. The intriguing twist? A decline in rates propelling both equity REITs and mortgage REITs to unprecedented heights together.
The moon, the undeniable realm of real estate, seems destined for a rendezvous with these soaring REITs – an inevitable alignment. Do not be oblivious to this euphoric ascent. It’s impacting the equity REITs significantly. These companies dabble in the ownership, operation, and financing of income-generating real estate across diverse property sectors.
Now, as interest rates climb, the costs of property financing for REITs experience a surge, potentially slowing the growth of their portfolios. On the flip side, when rates plummet, borrowing becomes cheaper, offering potential for enhanced profits and robust dividend growth. And thus, like the ebb and flow of the tides, the influence of interest rates on REITs remains palpable.
Enter mortgage REITs! Diverging from their traditional counterparts, these entities predominantly focus on investing in mortgage-related assets. Their modus operandi centers around the utilization of leverage to finance their investments, aiming to widen their returns on equity. A drastic increase in rates would usually spell doom for these mortgage REITs, but today’s narrative unfolds differently, with the dip in rates imparting a much-needed boost to their fortunes.
On the personal front, my investment strategy navigates a seemingly precarious path with small stakes in mortgage REIT common shares and BDC shares. The lion’s share of my portfolio, though, finds its haven in preferred shares and equity REITs. Notably, the fixed-to-floating shares have emerged as game-changers, offering a shield against the volatility of interest rates while providing consistent returns.
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The journey doesn’t end here; buckle up as we delve into the residential mortgage REIT charts and commercial mortgage REIT charts. These visual masterpieces, adorned with invaluable metrics, beckon you to a world of precise estimations and calculated projections.
The precipitous change in book values underscores the need for upgraded charts, meticulously updated to reflect the most recent values. The veracity and reliability of the data hinge on these updates, ensuring the most accurate analysis for our discerning readers.
We’re not just about charts; we’re also offering a treasure trove of metrics for preferred shares. This neatly curated table presents a comprehensive overview, consolidating vital information to empower readers in their decision-making process.
Our overarching mantra? To maximize total returns. Our meticulous trading strategies underscore the centrality of book value, unearthing inefficiencies in stock prices and capitalizing on short-term deviations. And for the buy-and-hold enthusiasts, we advocate a judicious mix of preferred shares and equity REITs.
Join us on a journey that turns microcap stocks into mighty giants! But tread carefully, for the road ahead is fraught with risks. A bold adventure awaits!
