It’s okay to get in those areas that are moving and above their trendlines. What’s not okay is hanging on as it falls below that line or 8% off its high and hoping against hope that things will turn around.
Now that consumer spending is at a stand still and real estate investment trusts are unattractive, what do savvy investors do? They bargain hunt! There are values to be had if you look for them. For instance, the Vanguard REIT Index (VNQ) is above its long-term trendline and has outperformed the broader market for 2008. The Retail HOLDRs (RTH) has followed suit, sitting above its trendline.
For full disclosure, Tom Lydon’s clients own shares of RTH.