Interest rates are going up. Housing starts and sales have slowed. The inventory of unsold houses is increasing. Is it time to take profits on your real estate funds?
One of the popular Exchange Traded Funds (ETFs) is IShares Cohen & Steers Rlty (ICF). At 31 December 2005 it closed at $74.84. It closed today at $82.60, a 10.37% gain for the first four months of the year. Of course, it hit a high of $88.31 on 17 March of 2006 which would have given an 18% gain. But, the situation was not nearly so clear then, and one of my rules is let your gains run.
So, if you took gains now, would you be happy with a 10.37% gain on the trade? I'm sure other REIT index funds have similar gains for the period. My feeling is you should be happy when the stock you've invested in is no longer the best investment you can make with the money.
If you decide to sell, where should you put your money? I believe the US dollar is poised for a pretty good fall over the balance of this year. Given that, I am considering increasing my allocation to an EAFE fund of some sort. Returns should be better than the US stock market and if I'm right about the US dollar, I'll get a currency kicker to boot.
So the question of the day is, Is it time to sell real estate funds and buy something else? What would you buy? COME ON IN, LEAVE A COMMENT, share your ideas!
Now go out and make some money!
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