As we know Ben Bernanke (Head of the US Federal Reserve) mention that Fed was going to start slowing down their bond purchase. This means bond price will starts to fall once the general interest rates start to climb.
Therefore, the REIT’s market got hit in a big way after Ben Bernanke statement. For myself, I continue to hold onto my REIT’s holdings but I only invest in the best REIT’s.
When people ask me what they should do with their current REIT’s holding, I will tell them to trim it and only keep the best. Especially, those REIT’s with strong balance sheet and majority of their debt are on fixed rates.
So, which sectors will benefit from the interest rate increase? The banks will definitely benefit from it because they are able to charge a higher interest rate to the rest.
Property owner/investors will starts facing pressure to pay their monthly instalment. I am not surprise that most property owners did not plan properly and think far ahead on this portion.
To be frank, I dun really bother with the recent market sell off as long the companies which I have invested continue to pay me dividends. This also means, should the market continue to fall further, company shares will get cheaper & it means opportunities for me to invest and accumulate more shares to snowball my dividend.