Poetic Portfolios

Several REITs stocks that I’ve been watching continue to decline in value well below any point that seems rational. This may present an opportunity well beyond that of other companies due to the immediate payback. Many REITs now demonstrate dividend yields above 25%. A recent article at Running of the Bulls notes that REITs now look cheap.

I’m willing to acknowledge that REITs are likely cheap for good reason. In many areas, commercial real estate is following the declines in residential real estate. The sharp decline in consumer spending is hitting practically every retail company. As a result, retailers are limiting expansion plans and closing stores. The financial sector has had massive layoffs that will likely damage the office sector. Manufacturing declines in the middle of the country will likely have negative effects on the industrial sector. There are definitely risks in this sector, but certain aspects of commercial real estate make REITs worth considering.
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I started this blog as a way to keep a journal of my thoughts about investing and to keep a record of my thoughts on individual companies. The Two Roads Diverged Portfolio is truly my investing testing ground.

If you look back at the beginning of this portfolio, a good portion of funds were invested in treasuries. These investments represented a rainy day fund. As I began to grow more comfortable with my analysis and investing, I began to invest these funds in stocks. Now it looks like this transition was a bit early.
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