Brad Case

Downside Beta and Upside Beta: REITs Have Generally Protected Against Stock Market Declines

os@interactivestrategies.com — Thu, 10 Jan 2019 19:14:46 +0000

REITs have generally protected against stock market declines, with downside beta typically well below one; moreover, their upside beta has usually been higher, giving investors a chance to “have it both ways.”

In the Wake of Stock Market Turmoil: Returns, Volatility, Correlation, Beta, Diversification Benefits, and Forward Expectations for REITs

os@interactivestrategies.com — Fri, 04 Jan 2019 20:42:29 +0000

December 2018 was bitter for investors. Total returns in the broad REIT market were -7.73 percent—but that was good news compared with large-cap stocks (-9.03 percent according to the S&P 500), small-cap stocks (-11.88 percent for the Russell 2000) and especially small-cap value stocks (-12.09 percent).

IRR is an Easily Manipulated “Performance” Metric

os@interactivestrategies.com — Wed, 05 Sep 2018 13:20:13 +0000

Most private equity investment managers measure their performance using IRR, and illustrates how SLOCs and forward commitments can be used to manipulate IRR computations to make performance appear better than it really is.

The REIT-Stock Correlation Has NOT “Spiked to One” During Market Crises

os@interactivestrategies.com — Tue, 21 Aug 2018 13:00:19 +0000

It is often said that “correlations spike to one during a crisis,” but REIT-stock correlations have actually been lower during the worst stock market downturns in history, reinforcing the case for REITs as a portfolio diversifier even during crises.

Inflation Protection from REITs: Constructing a Diversified Inflation-Protecting Portfolio

os@interactivestrategies.com — Fri, 20 Jul 2018 13:03:45 +0000

How to construct an inflation-protecting portfolio without exposing yourself to the risk of guessing wrong about an increase the inflation rate.

Inflation Protection from REITs: Don’t Jump Out of the Frying Pan Into the Fire

os@interactivestrategies.com — Wed, 18 Jul 2018 12:50:18 +0000

Investors who depend on commodity investments to protect against inflation risk negative returns if inflation doesn’t meet their expectations, whereas REITs have historically provided strong returns in both high-inflation and low-inflation environments.

Inflation Protection from REITs: Solving a Growing Problem

os@interactivestrategies.com — Mon, 16 Jul 2018 13:18:53 +0000

Ask anybody which investments “hedge” against inflation, and real estate is one of the three that pretty much everybody will identify, along with commodities and inflation-linked bonds

Sharpe Ratios for REITs by Property Type

os@interactivestrategies.com — Thu, 31 May 2018 13:28:59 +0000

REIT diversification benefits come not merely from their low correlations to other assets but also from their historically strong risk-adjusted returns.

Return Correlations between REITs and the Broad Stock Market by Property Type

os@interactivestrategies.com — Tue, 22 May 2018 12:31:49 +0000

REIT returns generally have low correlations with returns from the broad stock market. Some REIT property sectors—including Health Care, Self Storage, Residential, Infrastructure, and Data Centers—seem to be especially defensive with average correlations of 65 percent or less even during periods encompassing market crises.

REIT Total Returns by Property Type: The Value of Exposure to All Sectors of the Real Estate Market

os@interactivestrategies.com — Mon, 14 May 2018 18:47:33 +0000

It should come as no surprise that the top-performing sector of the REIT market varies through time, suggesting that most investors will want to maintain exposure to every part of the real estate asset class.