Theories abound on why 2005 began on such a tepid note. They include: investors gobbling up pent-up profits in order to take their gains, a strengthening equities market and, perhaps the most popular culprit, rising interest rates.
REIT experts caution that the January slide isn’t a telltale sign of impending doom. In fact, the correction may be part of a healthier long-term process. They say it’s inevitable that returns will regress to the mean. The trend over the past few years has seen REITs trading well above the 10-year historical average of 15.5 percent.
Experts do not believe that a 31.5 percent return is normal. He also scoffs at reading too much into short-term market gyrations.
One good sign is that fundamentals are improving and REITs are for the most part reporting strong earnings. What’s more, few are forecasting any sudden changes on the horizon. A total of seven REITs will be announcing their fourth-quarter 2004 results this week, among them Crescent and Vornado.
