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While REITs have been on a roll lately, thanks in part to getting their own sector in the S&P 500 Index, they are starting to lose steam as investors consider the chances of a December rate hike.
Despite investor wisdom saying such short-term thinking does not make for good investments, many are finding it hard to be prudent when they’re faced with the prospect of losing money, InvestmentNews reports. And rising rates are usually seen as a bad sign for REITs, since they are so dependent on financing debt.
While experts generally agree that raising rates is bad for REITs in the short term, many say investors who hold on for the long run will be rewarded, particularly since rising rates tends to indicate a growing economy, and a stronger economy means climbing cash flows for REITs. [InvestmentNews]
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