Morningstar DividendInvestor: REITs Overvalued

Morningstar has released part of a newsletter regarding real estate investment trusts (REIT). Although they like holding some REITs for the dividends, they weren't optimistic about the future valuations.

"MDI: Are valuations excessive enough that existing owners should consider selling?

Perlmutter: If you've already seen a nice capital gain from REIT shares and have higher total-return expectations than the current yields, I think the time to check out is here. I believe prices have nowhere to go but down.

Dobratz: If REIT insiders sold $200 million of their stock in the fourth quarter of 2004, why should you shy away from taking profits? I would walk away in a lot of cases."