| Article ID: | iaor201523427 |
| Volume: | 37 |
| Issue: | 1 |
| Start Page Number: | 55 |
| End Page Number: | 74 |
| Publication Date: | Feb 2014 |
| Journal: | Journal of Financial Research |
| Authors: | Blau Benjamin M, Whitby Ryan J |
| Keywords: | investment, economics |
The recent extremes in the real estate economic cycle have created an ideal setting to investigate the role of speculative trading. Specifically, we focus on speculative trading in real estate investment trusts (REITs) during the recent boom and bust in real estate. Although we find a strong relation between speculative trading in REITs and the economic cycle, we do not find evidence that speculative trading is related to future returns. Our results suggest that although increased speculative trading is apparent in REITs during the boom years, the level of speculative trading in REITs does not appear to affect the quality of markets at large.