There’s no denying that PE’s on the property trusts look stretched and we are likely facing a period of price consolidation. Earnings growth is attractive but yields have compressed too far. In some cases, yields on property trusts of barely 3% offer investors little risk reward. However, if you feel the US will not raise rates in September, you may share my view that we could see another bounce, (approximately 5%), yet to play out.
WFD, GPT and SCG are all on my radar as buy signals. I think we get a small bounce from here and it will then pay to sell tight covered calls to double the cash flow over the next 6 months, whilst still remaining exposed to the next round of dividends.
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Feel free to contact me leon@investorsignals.com to discuss how we can help set up these strategies and others on your investment portfolio.
