Housing Slumping
Another chart on the housing situation - this time from David Rosenberg of Merrill Lynch. Note the S&P 500 is 12-month lagged. We're more constructive on the stock market for 2007 than this implies; but it provides more evidence that some caution is warranted on this intermediate-term overbought equity market. The buyers strike in housing likely has further to run.
Strategy Update: Given the above, our timing may not be ideal but we have recently added a REIT offering to our stable of managed strategies. The model has a combination backtested and real-time performance of 20.04% YTD; we do not expect a repeat of this over the next period of the same duration and would wait for a pullback before recommending. The Strategy uses REIT closed-end funds when the discount to Net Asset Value is attractive, and when it isn't, the Strategy utilizes the REIT exchange-traded fund or individual REITs. Our individual REITs are currently concentrated in the Office and Industrial sector.
Strategy Update: Given the above, our timing may not be ideal but we have recently added a REIT offering to our stable of managed strategies. The model has a combination backtested and real-time performance of 20.04% YTD; we do not expect a repeat of this over the next period of the same duration and would wait for a pullback before recommending. The Strategy uses REIT closed-end funds when the discount to Net Asset Value is attractive, and when it isn't, the Strategy utilizes the REIT exchange-traded fund or individual REITs. Our individual REITs are currently concentrated in the Office and Industrial sector.
posted by WRA Strategy Group at 5:25 PM
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