iREIT Daily

The Nasdaq Just Made a “Big” Bear-Market Move

Brad Thomas

467 postsJanuary 20, 2022

Let’s start out with what happened in the markets yesterday. And not just the end results but the extreme confusion on which direction to take too.

There were at least four significant course corrections yesterday for the major U.S. indexes, which started in the green. But before the morning could close, they were down into negative territory. Then, mid-day, they were up again, only to finish this way:

S&P 500 – down 44.35 points, or 0.97%
Dow – down 339.82 points, or 0.96%
Nasdaq – down 166.64 points, or 1.15%.

The Russell 2000 followed suit with that basic pattern – just with a much smaller and shorter mid-day bump – ending 30.13 points underwater, or 1.44%. Whereas crude oil and gold started and continued up to finished at 1.11 (1.30%) and 31.20 (1.72%), respectively.

The Nasdaq, incidentally, is now officially in a correction, down 10%+ from its November high. And an Investor’s Business Daily article yesterday gave further details into the state of the S&P 500 as well.

“Still wondering if a bear market is coming soon for the” index, it asks. “It’s already here now for a staggering number of U.S. stocks.” Apparently:

More than a fifth of the stocks in [it] are now down 20% or more from their highest closes in the past 52 weeks. That puts more than 100 S&P 500 stocks, including giants like consumer discretionary Penn National Gaming (PENN), communication services ViacomCBS (VIAC), and healthcare Moderna (MRNA), firmly in grasp of a bear market.

And then it adds this line, which I find particularly interesting: “So if you’re waiting for an S&P 500 bear market, it’s already here if you own the wrong stocks.”

The broader index, however, is not even down 10% yet, which Wall Street deems as official correction territory.

More Non-REIT News

At this point, I’m going to remind readers of my January 14 blog post, “Why You Shouldn’t Fear a 10% Correction.” In it, I quote the well-respected Mark Hulbert of Hulbert Ratings as saying:

There’s nothing magical about a stock index hitting the 10% decline… So we need to stop treating this 10% mark as meaningful. It isn’t. The odds that stocks will rise are no different after a 10% decline than they are before.

Besides, that’s looking at an entire index. And as my Dividend Kings colleague Dividend Sensei likes to say, “It’s a market of stocks, not a stock market.” Hardly an original statement, I know, but it’s an exceptionally valuable one nonetheless.

Even that bearish Investor’s Business Daily article – which, for the record, has every logical right to its negative opinion – acknowledges this fact (intentionally or otherwise) with that sentence about owning “the wrong stocks.”

There are wrong stocks to own. It’s as simple as that.

What’s not so simple is owning the right stocks, from determining which ones they are to properly aligning them in an intelligently diversified portfolio, to holding onto them despite larger market negativity.

Or to trimming and even selling positions altogether when they become too overvalued. That’s why I and my team have sounded like a broken record this past year about overvaluations.

You can own awesome stocks. But if other investors get too enthusiastic about them and you let yourself get caught in that wave, you will pay the price.

Valuation matters every bit as much as quality. You can’t have one without the other and expect superior returns. That’s one of the absolutely necessary foundations Wide Moat Research is built on… and one of the reasons why we have the repeated success stories that we do.

The World According to REITs

In real estate investment trust (REIT) affecting news, Target (TGT) CEO Brian Cornell is optimistic about his company’s 2022 prospects. But he expects consumers to modify their spending habits due to inflation nonetheless.

They’ll drive fewer miles and make fewer runs, he informed a National Retail Federation gathering. Cornell also sees people eating at home more and selecting non-brand-names to further cut costs.

In other real estate investment trust (REIT) affecting news, Emirates will resume its Boeing 777 flights to the U.S. tomorrow. And Amazon (AMZN) will open a physical clothing store at a bricks-and-mortar mall in California later this year.

The Kohl’s (KSS) sized store will deliver personalized recommendations to customers’ phones. Whatever they select will then be waiting for them in fitting rooms.

It’s a fascinating move for an online company that became the U.S.’ No. 1 clothing seller last year… further supporting the case for actual REITs, of which we have the following updates:

American Homes 4 Rent (AMH) priced an underwritten public offering of 20 million shares at about $39.15 each. Half will come directly from AMH and the other half through a forward sale agreement. Net proceeds will help repay indebtedness, develop new communities, and acquire already established ones.
Hersha Hospitality Trust (HT) saw 7.2% average daily rate (ADR) growth to $250. October and November revenue per available room (RevPAR) was down 30% and 21%, respectively, over 2019 figures. Yet December was only 14% below its pre-pandemic point despite the Omicron surge.
CyrusOne (CONE) signed a definitive agreement with DataBank Holdings to sell its four Houston, Texas, data centers. Total consideration for the deal will be about $670 million.

Finally, here’s yesterday’s biggest REIT ups and downs, which I’m sure you were wondering about:

(Source: The Daily REITBeat)

Happy Investing

Brad Thomas

467 posts

View all my Posts

Brad Thomas is Senior Research Analyst at iREIT and CEO of Wide Moat Research LLC. With over 30 years of real estate experience, he is also long-time Editor of Forbes Real Estate Investor, a monthly subscription-based newsletter that dives deep into the vast world of profitable properties, and since 2021, he has served as an adjunct professor at New York University.

Thomas has also been featured on or in Forbes magazine, Kiplinger's, U.S. News and World Report, Money, NPR, Institutional Investor, GlobeStreet, CNN, Newsmax, and Fox. And he was the #1 contributing analyst on Seeking Alpha in 2014, 2015, 2016, 2017, 2018, 2019, 2020 and 2021 based on both page views and number of followers.

Thomas is the recently-published author of The Intelligent REIT Investor Guide (2021), co-author of The Intelligent REIT Investor (2016), and he wrote The Trump Factor: Unlocking The Secrets Behind The Trump Empire (2016) - all available on Amazon.

Thomas received a bachelor of science in business/economics from Presbyterian College and is married with five wonderful kids.

Major Market Figure Calls Current Conditions a “Vampire Phase”

REIT Mutual Fund	Symbol
Alpine Realty Income and Growth Fund	AIGYX, AIAGX
American Century Real Estate Fund	REAIX, REACX, AREEX, AREWX, ARYCX, AREDX
Real Estate Securities Fund	MRESX
AR Capital Real Estate Income Fund	ARIAX, ARICX, ARIPX
AssetMark Real Estate Securities Fund	AFREX
Aston/Harrison Street Real Estate Fund	AARIX, ARFCX
Baron Real Estate Fund	BREIX, BREFX
BlackRock Real Estate Securities	BIREX, BAREX, BCREX
Brookfield U.S. Listed Real Estate Fund	BRUAX, BRUCX, BRUIX, BRUYX
CGM Realty Fund	CGMRX
West Loop Realty Fund	REIIX, REIAX, REICX
Cohen & Steers Institutional Realty Shares	CSRIX
Cohen & Steers Realty Income Fund	CSEIX, CSDIX, CSBIX, CSCIX
Cohen & Steers Realty Shares	CSRSX
Columbia Real Estate Equity Fund	CREAX, CREIX, CRRVX, CRERX, CREEX, CRRFX, CREWX, CRECX, CREBX
Compass EMP REC Enhanced Volatility Weighted Fund	CWRAX, CWRIX, CWRTX, CWRCX
Davis Real Estate Fund	RPFRX, DREYX, DRECX, DREBX
Delaware Real Estate Investment Trust Portfolio II	DPRTX, DPRBX
Delaware Real Estate Investment Trust Portfolio	DPREX, DPRSX, DPRRX, DPRCX
DFA Real Estate Securities Portfolio	DFREX
Dunham Real Estate Stock Fund	DAREX, DNREX, DCREX
DWS RREEF Real Estate Securities Fund	RRRRX, RRREX, RRRAX, RRRSX, RRRBX, RRRCX
DWS RREEF Real Estate Securities Income Fund	REFAX, REFCX, REFIX, REFSX
Eaton Vance Real Estate Fund	EAREX, EIREX
EII Realty Securities Fund	EIIRX
Fidelity Advisor Real Estate Fund	FHEIX, FHEAX, FHETX, FHECX, FHEBX
Fidelity Advisor Real Estate Income Fund	FRIRX, FRIQX, FRINX, FRIOX
Fidelity Real Estate Income Fund	FRIFX
Fidelity Real Estate Investment Portfolio	FRESX
Fidelity Spartan Real Estate Index Fund	FSRNX, FRXIX, FSRVX
Fidelity Series Real Estate Equity Fund	FREDX, FREFX
Fidelity Series Real Estate Income Fund	FSREX, FSRWX
Forward Real Estate Long/Short Fund	KSRYX, FRLSX, FFSRX, KSRAX, KSRCX, KSRBX
Forward Real Estate Fund	FPREX, FFREX, KREAX, KRECX
Forward Select Income Fund	KIFYX, FSIMX, FFSLX, KIFAX, KIFBX, KIFCX
Franklin Real Estate Securities Fund	FREEX, FRLAX, FRRSX, FSERX
GMO Real Estate Fund	GMORX
Goldman Sachs Real Estate Securities Fund	GREIX, GRETX, GREAX, GRESX, GRERX, GREBX, GRECX
Great-West Real Estate Fund	MXREX
Heitman REIT Fund	OARTX, OBRTX
ING Real Estate Fund	CRARX, IREWX, IDROX, CLARX, CRWRX, CRCRX, CRBCX
INVESCO Real Estate Fund	REINX, IARFX, IARIX, IARYX, IARAX, IARRX, IARCX, AARBX
Ivy Real Estate Securities Fund	IRSAX, IREIX, IRSYX, IRSRX, IREEX, IRSCX, IRSBX
John Hancock Real Estate Securities Fund	JIREX
Johnson Realty Fund	JRLTX
J.P.Morgan Realty Income Fund	URTLX, JRIRX, URTAX, URTBX, URTCX
J.P. Morgan Security Capital U.S. Core Real Estate Securities Fund	CEEAX, CEERX, CEEFX, CEESX, CEECX
J.P. Morgan U.S. Real Estate Fund	SUSIX
Lazard U.S. Realty Equity Portfolio	LREIX, LREOX
Lazard U.S. Realty Income Portfolio	LRIIX, LRIOX
Manning & Napier Real Estate Series	MNRIX, MNREX
Morgan Stanley Institutional U.S. Real Estate Portfolio	MSUSX, MUSDX, MSULX, MURSX
Natixis AEW Real Estate Fund	NRFAX, NRFYX, NRFBX, NRFCX, NRFNX
Neuberger Berman Real Estate Fund	NBRIX, NBRFX, NREAX, NRERX, NRECX, NRREX
Nuveen Real Estate Securities Fund	FREAX, FARCX, FRSSX, FREBX, FRLCX, FREGX
Oppenheimer Real Estate Fund	OREAX, OREIX, OREYX, ORENX, OREBX, ORECX
PHOCAS Real Estate Fund	PHREX
PIMCO RealEstateRealReturn Strategy Fund	PRRSX, PETPX, PETAX, PETDX, PETCX, PETBX
Pioneer Real Estate Shares	PWREX, PYREX, PCREX, PBREX
Principal Real Estate Securities Fund	PIREX, PIRPX, PREPX, PRETX, PREJX, PRRAX, PRERX, PRENX, PRAEX, PRCEX, PRLEX
ProFunds Real Estate UltraSector ProFund	REPIX
Prudential Select Real Estate Fund	SREAX
Prudential U.S. Real Estate Fund	PJEAX, PJEZX, PJECX, PJEBX
REMS Real Estate Income 50/50 Portfolio	RREIX
REMS Real Estate Value-Opportunity Fund	HLRRX, HLPPX
Rydex Real Estate Fund	RYREX, RYHRX, RYCRX
SA Real Estate Securities Fund	SAREX
SEI Institutional Mgd Real Estate Fund	SETAX, SEIRX
Spirit of America Real Estate Income & Growth Fund	SOAAX
SSgA Clarion Real Estate Fund	SSREX
Stratton Real Estate Fund	STMDX
T.Rowe Price Real Estate Fund	TRREX, PAREX
TIAA-CREF Real Estate Securities Fund	TIREX, TRRPX, TRRSX, TCREX
Vanguard REIT Index Fund	VGSNX, VGRSX, VGSLX, VGSIX
Virtus Real Estate Securities Fund	PHRAX, PHRIX, PHRCX, PHRBX

REIT ETF	Symbol
Flex Shares	ASET
Wisdom Tree Global Ex-US	DRW
S&P 500 Equal Weight	EWRE
iShares FTSE Industrial/Office	FNIO
MSCI Real Estate Index	FREL
S&P REIT Index	FRI
First Trust S&P REIT	FRI
iShares Real Estate 50	FTY
Flexshares Global	GQRE
iShares Cohen & Streers	ICF
iShares International Developed RE	IFGL
iShares US RE	IYR
Premium Yield Equity REIT	KBWY
ETRACS Monthly Pay 2x Leverage	MORL
Market Vector Mortgage	MORT
iShares Global REIT	REET
iShares FTSE Mortgage	REM
iShares Residential	REZ
IQ US Real Estate Small Cap	ROOF
iShares FTSE NAREIT Retail	RTL
DOW Jones Global RE	RWO
SPDR Dow Jones	RWR
Schwab US REIT	SCHH
Super Dividend REIT	SRET
ProShares Ultra RE	URE
Vanguard REIT	VNQ
Vanguard Global ex-US	VNQI
iShares International Developed	WPS
Wilshire US REIT	WREI
Pacer Benchmark Data & Infrastructure RE	SRVR
Pacer Benchmark Industrial RE	INDS
Pacer Benchmark Retail RE	RTL
Hoya Capital Housing	HOMZ
NetLease Corporate RE	NETL

REIT Name	Ticker	Annual Increases/yr
Federal Realty	FRT	51
Universal Health Realty	UHT	33
National Retail Properties	NNN	29
Realty Income	O	27
Tanger Outlets	SKT	26
Urstadt Biddle	UBA	25
Essex Property Trust	ESS	25
W.P.Carey	WPC	22
National Health Investors	NHI	17
Equity Lifestyle	ELS	15
Digital Realty	DLR	15

The Nasdaq Just Made a “Big” Bear-Market Move

Brad Thomas

467 postsJanuary 20, 2022

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467 postsJanuary 20, 2022

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