Except that interest rates as we used to know them , will not be the same threat to yields and asset valuations i suspect.
The Fed are talking about a gradually evolving to a three year rise to a neutral level of 2.75 %.....which is something that commercial property will be comfortably able to adjust to.
With the big sheds being let for on-line retailing deliveries, which is a growing market, the rents will be able to absorb and grow with low interest rates at these new levels too.
The assets will reflect these returns as well.
Key Takeaways From the September Fed Meeting
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By Harriet Torry
Federal Reserve officials didn't raise short-term interest rates Wednesday, but a December increase remains on the table. Meanwhile, the central bank said it would initiate in October its long-telegraphed plan to shrink its securities holdings. Here are key takeaways from the Fed's two-day policy meeting:
Looking to December
The Fed's summary of economic projections suggests officials are still on track to raise short-term interest rates once more this year, most likely at the Dec. 12-13 meeting when Chairwoman Janet Yellen will hold her next press conference. The Fed meets again Oct. 31-Nov. 1, but no press conference is scheduled then. Fed officials expect to raise rates three more times next year, a forecast unchanged from when they last submitted economic projections in June. Officials lowered their median forecast for the path of rates in 2019: They now expect two rate increases that year, down from three. Officials expect rates to rise once in 2020.
Trending Lower for Longer
Fed officials brought down their expectation for where they see interest rates settling in the longer run, to 2.75% from an earlier forecast of 3%. The drift downward reflects a lowering in officials' view of the so-called neutral rate, an underlying interest rate that is consistent with the economy operating at its full potential and expanding without overheating. Ms. Yellen told reporters that "because the neutral rate currently appears to be quite low by historical standards, the federal-funds rate would not have to rise much further to get to a neutral policy stance."
Will She Stay or Will She Go?
Ms. Yellen is keeping her cards close to her chest regarding what she think about her future as her term as Fed chairwoman ends Feb. 3, 2018. She reiterated Wednesday that she intends to serve out her current term, but said, "I'm really not going to comment on my intentions beyond that." She told reporters that she hasn't had a meeting with President Donald Trump since the early days of his presidency. The two have met just once, for about 15 minutes, in the Oval Office in February. Mr. Trump has said he is considering renominating Ms. Yellen, but that he is considering others for the post as well.
Roll On the Rolloff
The Fed in October will initiate its long-telegraphed plan to shrink the portfolio of bonds acquired after the 2008 crisis. That means the Fed will end its practice of fully reinvesting the principal payments of maturing bonds into new bonds and instead allow $10 billion in holdings to roll off without reinvestment every month. Those amounts will increase by $10 billion each quarter to a maximum of $50 billion from October next year. "Our balance sheet is not intended to be an active tool for monetary policy in normal times," Ms. Yellen emphasized Wednesday, adding that "we therefore do not plan on making adjustments to our balance-sheet normalization program."
Sticking to Its Guns
With the rolloff of its holdings ready to start, Ms. Yellen said there is now "a somewhat high bar to resume reinvestments," and only "a material deterioration in the economic outlook" would prompt the Fed to consider such a move. "It will be up to future policy makers to decide in the event of a severe downturn whether they think it's appropriate to again resort to addi
"With the FTSE indexes leaping ahead in March, it would be easy to forget that investors have endured some turbulent conditions over the past six months. But while double-digit price swings have been common in some of the market's largest shares, ..."
"With interest rates at record lows, investors have targeted equities and other assets where returns are far better. As a consequence, certain sectors have witnessed a sharp rise in share prices, among them UK real estate investment trusts ..."
What happens to the share price when interest rates rise?
Is the money used for financing bought at a fixed or variable interest rate?
Clearly if it is variable the profit margins will fall which means that the share price will be hit.
The other side of the coin is the cash value of the assets themselves and that of course remains a total unknown as there are all sorts of factors at play here that are directly linked to the state of the economy and so on.
Shorting a rising stock....is much worse when it is done by your resident posters that seemingly are your buddies and convince 'long' holders to give up!
What many pi's fail to grasp is the extent that shorting is taking place. Often we tend to think that the 'shorter' is done with and we expect the stock to now rise, now that 'he' is out of the way? You'd be wrong in many instances, for 'he' the shorter, is often followed by others that 'help' keep the stock down !
Some stocks fall after GOOD NEWS! ....IS it just normal levels of profit taking? Yes, imo....
...BUT the underlying reason for many pi's taking early profits, is simply they are afraid they'll be left in paper losses!
Thus, if the stock, after 'good news' is then shorted, then kiss good bye to this stock reaching new highs in the very near term!
We can't both WIN !
The 'shorts' therefore 'win' their bets, whereas the 'longs' lose the best part of their investment, possibly for some time to come......and just when you thought this couldn't go any lower, THEY'LL SHORT THE STOCK AGAIN !
Why is this? They both can't win...the money has to come from somewhere?
Thanks for all your support. We are now at 4,378 votes!
AND SOARING !
(that's A LOT of irate investors!)
Investors are saying something? They are voting in their thousands !
Bookmark the links if you wish to 'pass the LINK/s on'.... or read later?
BE A PART OF IT
# The big problem with shorting is that THEY (the shorters) WOULD most likely lose most of their money IF they just 'bet' on the price going down without trying to 'help' it down?
So, there is the 'catch 22' scenario. No one would know of an RNS to be released that will contain BAD NEWS, if they did and then 'shorted' the stock, then they are guilty of 'insider trading'.
The only sure way to short a stock and WIN is to spread dis-information to defame the company with help from other posters that are in concert with them. To ENSURE that they don't lose the biggest part of their 'short', ironically, then, they must deramp with (seemingly) believable posts.
When the pro's do it, they simply get the media or well known 'crooked' tipsters, analysts or brokers to do it for them. (say no more). .They're all in cahoots with each other!
The campaign against shorting is for the benefit of the 'cheated' investors that cannot control their investments due to the dirty tricks played out by co-ordinated deramping in order to tank the sp to abnormally low levels.
When the campaign is complete, the results will be reviewed by Govt legislators re- further action! The branch of the FSA ie FCA will be asked by Davide Serra to conduct an investigation into short selling practices, with the view to either:- an outright ban on short selling, or at the very least to be better and more vigorously regulated !
The HMGovt epetition is a regulated and monitored site with legal authority that will NOT under any circumstances allow any auspicious individuals to prevent 'others' from casting their free votes. Discussions of which are freely entered into with individual viewpoints.
"LondonMetric is building a very robust rental income stream, the virtues of which will shine all the more brightly when sentiment towards the property sector is less buoyant. The shares trade on a deserved 7 per cent premium to expected book value. JC"
LondonMetrics repositioning over the past year is expected to increase the rent roll by £5.7m. This is important because at the half-year stage the dividend was uncovered by earnings a situation that Mr Jones expects to be resolved soon. True, the shares trade at a hefty premium to book value, yet they still yield 5 per cent.
Given the quality of that rental income and the potential for valuation gains in the underlying portfolio, we upgrade to buy.
I don't see bank rates at this level for many years. I am pencilling in 1.5% for 2016 making the 7.6% yield still pretty good.
The trouble with bank rates at 5% is that the government, being the largest holder of debt, would need to make further swingeing cuts to services to finance the repayments. Obviously this will act as a counterbalance to growth.
There endeth the lesson.
A new deal this morning for a M&S distribution site with a starter yield of over 7%.
All good stuff!
However in view of the fact that BOE likely to raise interest rates because of the allegedly booming economic growth please will some bright person say whether these good yields are likely to make sense should we have a bank rate of about four to five per cent.
Perhaps it is all relative and the interest on the money we borrow to finance these ventures is locked in.
The answer to your question must lie in the % of the business that is owned by the Board.
Luckily we have some institutional investors involved, we are not just some nasty little AIM share.
Hopefully there will never ever be a postion where you will become a shareholder and that you will for ever be a watcher!!!!!!
All the best.
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