The REIT sector has been beaten down later as a result of the economy. The low price for a barrel of crude oil is starting to show its effects right across Canada. Thousands of Alberta workers live in other parts of Canada on their days off. With these people not working very much, means they are spending less in their own communities.
Another factor in why REITs are not performing well is due to the interest rate situation. Interest rates have been low for quite a while. This means the price of borrowing is cheaper for new mortgages and renewals. But interest rates will eventually rise, so this future possibility could be already factored into the current price of the REIT.
I currently own units in Cominar REIT (CUF.UN) and Dream REIT (D.UN). I just recently purchased more units of Dream REIT, which you can read about here. For disclosure, I also own shares in Killam Properties (KMP), which trade as a corporation.
I looked to this sector to place a trade. On September 28, I purchased 150 units of Cominar REIT inside my margin account at a price of $15.98 per unit. I immediately placed a limit order to sell the units. On September 30, their volume of shares traded was low, so I lowered my limit order to get filled. I am still long Cominar REIT in my tax free savings account.
Initial Cost= 150*15.98+$5.47
Proceeds of Sale (including commissions) = $150*16.11-$5.47
Profit = $2411.03 - $2402.47
The profit was real small. This trade used some margin of around $600.00. As of right now, my cash in my margin account is positive.
Disclosure: Long CUF.UN in TFSA.
am not a financial planner, financial advisor, accountant or tax
attorney. The information on this blog represents my own thoughts and
opinions and should NOT be taken as investment or business advice.
individual should do their due diligence to make their own financial
decisions based on their financial situation and tolerance for risk.