- With inflation showing signs of coming down, investors are now expecting a slower pace of interest rate increases. This has helped to lift sentiment for the REITs.
- REITs offer a dividend yield of 7.2% on average, higher than the yield on the 6-month T-bill of 4.0% p.a.
- If we believe that interest rates will start declining or are taking a longer term view, then it might be worthwhile to start looking at the REITs.
- If we prefer something that is safer and offers a regular interest payment, then the T-bill might be worth a look.
What happened?
Apart from the FTX collapse and easing of Covid-19 measures in China, the other big news in financial markets in the past week was the easing of inflation in the US. The Consumer Price Index (CPI) for October rose by just 7.7%, compared to economists’ forecast of 7.9%. The market moved very quickly in reaction to the lower than expected inflation data....
