An interim note

Last week was a tough one for the S&P.  It nicely rebounded today, but is still down from the beginning of last week through today.  Specifically, the S&P closed on June 8 at 2779.03, and closed today at 2767.32.  That’s a decline of 0.42%.  That’s not the end of the world, of course, but that’s an annualized loss of about 13%.

The real question is how does a well-managed REIT fund, like ACCRE, perform during these S&P hic-cup periods.  In other words, does ACCRE serve a solid diversification role?  To check this, we looked at the closing value of our fund as of June 8, as well as its value as of 5pm today (our account doesn’t actually close yet, due to after-market trading).  We actually increased in value to the tune of 0.57% over that time period, for an positive annualized return of about 18%.  Hence, during this recent, tumultuous week, we not only attenuated a diversified portfolio, but we also out-performed the S&P by a healthy margin.

Naturally, short-term results do not tell us very much, and later we’ll explore these attenuation factors directly with some statistical analyses.

Light reading for the weekend

Interspersed with portfolio updates and monthly reports, I want to provide readers with some links to useful information about REITs, to help them better understand the industry and what we’re doing here at ACCRE.  Rather than a tutorial, these will seem a bit random, but hopefully will give the reader and idea about what we are reading, so you can understand the trades when we make them.

Today, I’m posting a great article about Sam Zell, from this month’s REIT Magazine.  Zell is a real icon in the industry.  His first REIT, Equity Office Properties, was the first one to be listed on the S&P 500.  Zell has recently written a book about his exploits.  Here is a link to the article, called Not So Subtle.

Trade alert

For the newcomers to ACCRE, these are the sorts of blog posts which will alert our readers to a new position. Subscribers will also receive a “push” e-mail (and the option of a text message) alerting them that we made a trade and the details of that trade.

And yes, we sold out of one position and bought into another one this morning.