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REIT Average Cumulative 8 Year Total Return 179%
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This chart tracks the average cumulative total return of the 93 REITs publicly
traded for the entire period from December 31, 1999 to December 31, 2007.
As shown in the chart, 2007 was a terrible year for the REITs, reducing
average cumulative total return by (73%), from 252% through the end of
2006 to 179% through the end of 2007.
We note the REITs are still dramatically ahead of both the S&P 500
Index and the Russell 2000 Index for the full 8 year period.
What about the Financial Mortgage REITs, the group hit hardest by the liquidity
panic of 2007?
Our index of 93 REITs includes 3 Financial REITs that are facing possible
bankruptcy, but still trading, including:
Hanover Capital Mortgage Holdings, HCM, stock
price down (90%) for 2007
Impac Mortgage Holdings, IMH, stock price
down (86%) for 2007
NovaStar Financial, NOVS, stock price down
(54%) for 2007
As the cumulative total return calculation includes the exceptional dividends
paid by these REITs during the 8 year period from 1999 to 2007, they are
still positive contributors to investors, not even near the bottom of the
REIT list.
All 3 of these Financial Mortgage REITs outperformed both the S&P 500
Index and the Russell 2000 index on a cumulative total return basis through
the end of 2007, with Hanover Mortgage Holdings providing investors with
cumulative total return of 83% over the 8 years, Impac Mortgage Holdings
67%, and NovaStar Financial 119%.
This chart should reassure investors that a BUY and HOLD strategy still
works for the REITs, even when including a terrible year like 2007.
How are these 93 REITs doing through 2008? Stock prices are down
less than (2%) on average since December 31, 2007.
Appropriate diversification by sector can help to balance a REIT portfolio.
Please review the attached file to see 93 REITs ranked by performance group.
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