Defensive Bifurcation:
Even though the real estate sector is in the red for 2022 thus far to the tune of 4%, it is faring far better than the S&P 500 which has declined by 10%. The XLRE also carries a decent dividend yield of 2.5%, although one should never buy anything on the dividend alone. One other thing to think about is that in a firm market downtrend that we are in, investors like to park their capital in conservative groups because they will likely “lose less”. Sometimes cash, even though it is paying very little is a good position. But give credit to the real estate sector, especially how it is performing compared to the S&P 500 as seen here on the ratio chart below. It shows the break above the bullish inverse head and shoulders pattern and although it has met its measured move remember those are just guidelines and can have investors selling prematurely. But admire how it gave an add-on buy point above a bull flag, and that’s what leaders do offer market players to add more on the way UP.