I came across the following quote today and kind of resonated with it in light of the recent REITs sell-down.
Warren Buffett says: For some reason, people take their cues from price action rather than from values. Price is what you pay. Value is what you get.
S-REITs share prices have taken a beating in the past two weeks in light of Fed talks about easing up on QE. Even though this may imply increase in interest rates, thereby somewhat affecting DPUs of S-REITs due to their borrowings, I feel that the sharp drop in price is overdone, and may be due to shortists affecting the market. The sharp drop in price may also be partly due to the rally S-REITs have sustained in the past year.
If you have decided at some point in time to load up on S-REITs because of their dividend paying policy and yield %, then, the drop in price should be deemed as a good time to accumulate more, rather than to sell them away. Afterall, the drop in price should not change the value of the company and the reasons for buying it, does it?
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