These 3 Vanguard ETFs Have Lagged the Market so Far in 2024, but Here's Why They're Great Investments Right Now
Small-cap stocks and value stocks have underperformed the market for the past several years. There are good reasons for the poor performance, but there's also reason to believe things could be about to change.
A Cautionary Note On The Impending REIT Rally
SA analysts are optimistic about REITs due to an expected interest rate drop. REITs dropped more than the Russell 2000 and the equal-weight S&P 500 in response to interest rate increases. Future developments are far from certain; be cautious about a REIT rally.
Profit From Emerging Uptrend in REITs Using Call Options
We are witnessing a rotation out of large-cap tech and into rate-sensitive real estate.
Prediction: This Will Be the Best-Performing Sector of the Second Half of 2024
The real estate sector has been a major laggard over the past couple of years. Much of the poor performance is due to the rising-rate environment and not because of any problems with the underlying real estate businesses.
VNQ: How Falling Interest Rates Would Impact REITs
Market consensus predicts a 70% chance of a 25 basis point rate cut in September and two cuts by December. Falling interest rates could benefit REITs through cap rate decline, transaction volume increase, cost of capital reduction, multiple expansion, and M&A stimulation. Discounted preferreds and REITs with moderate to high leverage with strong businesses may be best positioned to take advantage of falling interest rates.
2 Top ETFs to Buy Now That Could Help Set You Up for Life
Lower interest rates could spark a rally in the real estate market. Rate cuts should also be a boon for small-cap stocks.
VNQ: Not An Optimal Way To Approach REIT Investing
Investing in Vanguard Real Estate Index Fund ETF is not an optimal way how to approach REIT investing in this environment. By going long VNQ, investors open an unnecessary exposure towards small-cap REITs at a relatively unattractive dividend yield. Instead, if investors are willing and able to conduct a proper due diligence, it is better to cherry-pick specific names that offer better risk-adjusted opportunities.
VNQ: Why I Won't Buy The Vanguard Real Estate ETF
ETFs make sense for many sectors of the market. But REITs are an exception. There are still ample opportunities for active investors.
Forget VNQ: Build Your Own High-Yielding Real Estate Portfolio
The tallest building in Fort Worth, Texas, was just foreclosed at a 91% discount to its price three years ago. The commercial real estate sector is facing significant challenges, including high vacancy rates and a wave of $2 trillion in maturities over the next three years. Building a diversified portfolio of hand-picked real estate stocks can provide better returns compared to investing in the Vanguard Real Estate ETF.
