A couple weeks ago Zenolytics highlighted Single Family Rental REITs as being the perfect defensive sector in light of the torrential downpour taking place in the equity markets.
As a test of our theory, with the S&P 500 down nearly 3% this past week, the two leading names in the sector and the stars of our report were basically unchanged in this week's trading.
Not only that, both AMH and INVH look like they are begging for higher prices.
It goes without saying that buying a portfolio of homes, fixing them up, renting them out and then rinsing, repeating this process ad infinitum is not a sexy endeavor.
It's not SaaS.
It's not Ibuying.
It's not 5g microchips.
But it works when the market sucks. And for the time being, the market does suck.
While we are due to a nice bounce here, the fact that a bounce is about to take place doesn't necessarily vaccinate the market against further calamity in the form of excessive, directionless volatility that creates an Exorcist inspired 360 degree rotation to take place for the heads of investors.
With that said, if you have sector like single family residential REITs that's treating you well right now, don't think the grass is greener elsewhere. Defensive, boring stocks just may be the way to go throughout the summer.
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