Look out below - iShares REIT ETF drops today

The iShares Dow US Real Estate ETF (IYR) just fell out of a trading range today. Looking at the chart below, you can also see it happened on a pickup in volume.

I have written previous posts on how the problems in subprime mortgages were not really affecting the commercial side of the real estate market and, indeed, real estate investment trusts have held their value much better than the home builders. Unfortunately, the continued dismal news from the housing sector lately must finally be taking its toll on the REIT sector, too. With the value of real estate falling in some markets, perhaps rental properties and condos are not the attractive investments many REITs originally thought they were. With reports of retail sales down, building or owning malls may not be as lucrative as it once was either.

I have mentioned before that there is an inverse ETF that more or less tracks IYR. It is the ProShares UltraShort Real Estate fund (SRS). You may want to check it out. IYR will probably find support around $82. If it breaks below that level, it could be a long way down.

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A couple of years ago, no one recognized the real estate bubble even though it was under everyone's nose. Now, analysts and bloggers are seeing bubbles everywhere they look. One of them, they say is in Brazil whose Bovespa stock market index has doubled in the last 12 months. Does the bubble accusation hold water? I don't think so and here are 7 reasons why Brazil is by no means a bubble economy: Exports have held up over the past year thanks to demand from China for Brazil's soya exports and iron ore. This was helped by the the Brazilian government's drive to improve trade links with Asia and Africa. Export diversification, spurred by a more active trade policy and increased focus on "south-south" trade under current president Lula, helped mitigate the decline in demand from OECD (Organization for Economic Co-operation and Development) countries A "sensible" economic framework has been in place since the 1990's. This has included inflation ...

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Most of the posts I and other financial bloggers write are typically focused on individual stocks or ETFs and managing active portfolios. For those folks who are more conservative investors, those whose main investment vehicle is a 401K, for example, the techniques for portfolio management might be a little different. The news of stock markets falling and pundits predicting recession is disconcerting to professional investors as well as to those of us who are watching our balances in an IRA or 401K sag. What approach should the average 401K investor take? Let's assume that the investor is contributing on a regular basis to one of these retirement accounts. There are two questions that the investor needs to ask: 1. Should I stop putting the regular contribution into stocks? My feeling is that investors making regular contributions are being handed a present by the markets. Every week the market goes down, these investors are lowering their average cost. When markets reco...

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