Market Commentary | February 20, 2026

Capturing Market Rotation in 3D

The shiny investments have lost some luster here at the start of 2026. With Bitcoin trading at roughly half its earlier highs, crypto no longer looks like a sure thing. AI investment by the Magnificent 7 tech companies hit a wall when discerning investors asked, “What’s the ROI on all of this capital expenditure?”

The deceleration of last year’s market engines has evolved into what some are calling a Market Rotation. Capital is rotating out of hoped-for growth into old standards of value, like utilities and real estate. We couldn’t be more relieved.

Discounts

The State of REITs, February 2026 Edition, described that because REITs performed so well in January, the average discount to NAV narrowed from -17.49% to -15.70%. The table below details the pricing on some of the issues currently available. We selected this set because it represents some of the discounted pricing available across industrial, healthcare, hospitality, housing, retail, and triple net sectors.  The double-digit discounts that remain make us optimistic about the potential upside that remains.

Dividends

The average REIT dividend yield of 4.57% compares very favorably to the approximate 1.15% yield of the S&P 500, or even the 4.10% yield of the 10Y Treasury. Yields of the issues listed above can provide high current dividend cash flow while one waits for the stock market to narrow the discounts further.

Dollars

If the above sounds like an intriguing opportunity, our custodian, TradePMR, adds some sweetener to the proposition. Through March 31, 2026, TradePMR will pay a 0.5% equity match for any new cash or securities transferred into your brokerage account. That small bonus will fund additional purchases of yield and value we are now targeting. To find out more about the equity match, please contact Robin Sherman.

We are currently 2/3s through earnings season, and the companies we track are performing operationally better than their recently appreciated but still deeply discounted share prices represent. We expect strong returns in the coming quarters.

Notes and Disclosure

Articles are provided for informational purposes only. They are not recommendations to buy or sell any security and are strictly the opinion of the writer. The information contained in these articles is impersonal and not tailored to the investment needs of any particular person. It does not constitute a recommendation that any particular security or strategy is suitable for a specific person.

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