Are REITs Down For The Count?

As you know I've been a fan of REITs and one in particular ARR.  It's been a rough few weeks for REITs who have taken a beating because of the murmur about the Fed easing up on QE3.  This would cause interest rates to go up and take away some of the stellar profit margins that have been making REITs attractive. 

Even if interest rates go up the effect on the profit margins will be minimal.  If you consider that these REITs can pay down some of their indebtedness and refinance to create a bigger profit margin.  The advantage that REITs have is that their commodity is real estate.  It's not like any other good or service that you would have trouble getting financing for. 

I personally feel that this is a minor inconvenience.  If you look at ARR when interest rates were higher the dividends were even higher than they are now.  That tells you that the company knows how to restructure their books to create the profits that allow them to pay the kind of dividends that they have been paying.

I think that now is the time to stock up even more on ARR.

Market Update #2 7-5-12

So here’s the setup…The ECB cut rates as expected and the ADP report was better than expected.  Also the jobless claims number was down and Central Bank of China has cut rates.  All the news is positive however the market can react in very strange ways even with positive news.  Since some investors were expecting QE3 (Quantitative Easing) because of the downward situation in Europe they may think that the Fed (Federal Reserve) will hold off on QE3 because of positive numbers in jobless claims and the other reports.

Bottom line…wait and see what the market does after the opening bell  

Stocks to watch:

SNE – Big release of Spider Man this week.  Target price 15.72 off of technical set up from the Daily chart

S (Sprint) – The technical setup looks good for Sprint.  I see a target price of $3.71 but if it breaks that level it could go higher

T – Dividend declaration at end of trading day

AAPL – British judge ruled against AAPL in its four patent infringement claims against HTC, they also are going to release a smaller ipad