For this weeks sector focus, I thought it might be good to look at a popular income-paying sector. Income investing is my topic at the Toronto World Moneyshow on Thursday (3:45pm) at the Metro Convention Center. More info on that below.
Many seniors and income-orientated investors have been buying REIT’s (Real Estate Investment Trusts) for good reason over the past few years. The sector continues to hold a long termed uptrend that began in 2009 as seen by the green trendline (iShares TSX Capped REIT ETF). The bigger trend hasn’t been broken, but a few danger signs may be appearing for the sector. This concerns me, knowing that many of the more vulnerable investors out there such as seniors and those who rely on their investments for income would be negatively affected by a reversal in fortune in REIT’s.
Three months of lower lows and lower highs – as noted on the chart by my short termed down sloping trendline – point to weakness in the group. The break of the 50 day MA is another sign of weakness. Comparative relative strength vs. the TSX (not shown) is relatively flat, indicating no leadership by the group.
As it stands, REIT’s continue to display adherence to the longer termed bullish trendline. Consider the group technically sound until this trendline, which stands at around $16.80 right now for the iShares ETF, is breached. The warning signs noted above (recent descending peaks, break of the 50 day MA) may be a heads-up for future downside.
By the way—I am on BNN tomorrow (Thursday) at 10:35am to interview with Frances Horodowski. I’ll be talking about gold, silver and the TSX.
Watch Keith live at the World MoneyShow in the comfort of your home or office!
The MoneyShow, where I will be appearing tomorrow – October 18th at 3:45pm at the Metro Toronto Convention Center – has launched a pretty cool feature this year. You can register ahead of time to watch the show on your computer.