What stock sector is down; is it on the verge of a comeback?

The enclosed podcast reviews a sector in the public stock market that has not performed well recently and asks the question whether it is on the comeback.

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Podcast Summary

Scott Wait, CPA, presents a Podcast on the real estate sector within the S&P 500, analyzing its recent decline of 5.77% year-to-date and 16.29% over three years. He attributes the drop to interest rate hikes and inflation, notes recent rate cuts as a positive sign, and advises investors to include real estate as a component of a diversified long‑term portfolio. The episode ends with a topic for the next podcast topic on private credit.

Key takeaway

Real Estate Sector Performance

The S&P 500 real estate sector has declined 5.77% year‑to‑date (as of December 1, 2024) and declined 16.29% over the past three years.

Scott explains that the data comes from Yahoo Finance and covers the period from December 2, 2024, to December 1, 2025, for the three‑year figure. Over the last five years, the sector actually gained 15.04%.

Reasons for Decline

The 2022 decline was driven by interest rate increases and inflation, two separate but related factors.

Mr. Wait states that the Federal Reserve raised rates five times starting in early 2022 to combat inflation, which hurt the real estate sector.

Recent Rate Cuts and Recovery Outlook

The Federal Reserve has reduced the overnight rate in September and December, which are encouraging signs for real estate.

He notes that while these cuts are positive, other inflation‑related factors make it difficult to predict a full comeback; he says, “Will it come back? It’s difficult to know.”

Portfolio Diversification Advice

Investors should consider real estate as part of a diversified, long‑term portfolio rather than a standalone investment.

Scott illustrates the potential with an example: the sector rose 10% in one month from December 2018 to January 2019, emphasizing that no one knows when a rebound will occur.

Upcoming Podcast Topic: Private Credit

The next podcast will address the recent media criticism of private credit and provide an overall perspective.

Mr. Wait mentions that audience questions and comments are always welcome, and he invites listeners to a complimentary meeting.