Andrew Moffs’ Top Picks for Sept. 30, 2026

Andrew Moffs’ Top Picks for Sept. 30, 2026

BNNBloomberg.ca Staff

September 30, 2026

Andrew Moffs, senior vice president & portfolio manager at Vision Capital, shares his outlook on Real Estate Stocks.

Top Picks: Chartwell Retirement Residences, First Industrial Realty Trust, RioCan REIT

MARKET OUTLOOK:

In recent weeks, an orderly expansion of U.S. 10-year Treasury bond and Canadian 10-year Government bond yields has primarily been driven by an inflection in the policy path of short-term interest rates toward a hiking cycle, and a rising term premium.

In short, investors are demanding higher compensation for duration risk due to rising fiscal debt loads, geopolitical uncertainty and competition for capital with the private sector as the artificial intelligence (AI) capex buildout intensifies.

As a capital-intensive business, this challenges the ongoing recovery of real estate lending and transaction volumes, as investors reprice deals to reflect higher borrowing costs, and triggered recent weakness in listed real estate securities.

Notwithstanding, economic growth appears to be strengthening. As reflected in the August release of S&P Global’s U.S. Flash Purchasing Manager’s Index (PMI), price pressures appear to be building in supply chains as economic activity accelerates at the fastest pace in five years, broadening to include expansion in both manufacturing and service sectors. This dynamic points to attractive operating potential for listed real estate investment trusts (REITs), as rental rates typically track inflation, and occupancy levels remain elevated within a growing economy.

Generally, strong operating fundamentals continue to support the backdrop for listed REITs today:

Falling new supply: Higher base rates and above-trend inflation have resulted in 48 per cent higher construction costs since 2020, resulting in decelerating new construction growth across nearly all property types, increasing both the replacement cost and the value of stabilized assets – it is “cheaper to buy than build”.

Access To Capital: Loosening lending standards from banks, combined with listed REITs’ low leverage profile, staggered debt maturities, and access to cost-advantaged unsecured debt is improving refinancing activity.

Resilient, Rising Cash Flows: Generally, constructive supply-demand fundamentals across the listed REIT landscape shifts pricing power from tenants to landlords. Through the second quarter (Q2) 2026 earnings season, 70 per cent of U.S. REITs “beat” consensus funds from operations (FFO) expectations, and 86 per cent increased full-year 2026 guidance.

Mergers and acquisitions (M&A): The median listed REIT continues to trade at a discount to its net asset value on both sides of the border today. The private real estate market dwarfs the listed REIT market, and has a proven track record of acquiring listed REITs to close the gap to Net Asset Value (NAV), surfacing value for its unitholders. A wave of listed REIT privatizations continue to gain momentum, with 21 takeovers of listed REITs in North America at an average 40 per cent premium to unaffected share/unit pricing over the last two calendar years.

Supply-demand fundamentals by property type and geographic region will create leaders and laggards, serving as the key determinant to which REITs/Real Estate Operating Companies (REOCs) can capture earnings growth in a regime where cap rates are pressured.

TOP PICKS:

Chartwell Retirement Residences (CSH.UN TSX)

Chartwell Retirement Residences is the largest owner of seniors housing in Canada, with more than 30,000 suites concentrated in core markets in Ontario (44 per cent of adjusted Net Operating Income or NOI), Quebec (34 per cent), Alberta (11 per cent) and British Columbia (11 per cent).

Canada faces a generational supply-demand mismatch in seniors housing. The 80 plus population is growing three to four per cent annually, and demand exceeds new supply by more than four-to-one. With new supply below one per cent of inventory and obsolete assets being demolished at 1.5 per cent, total inventory is shrinking. Canada would need to deliver 20,000 units a year to meet demand, versus only 7,300 annually over the past decade. Additionally, rising construction costs create high barriers to entry and push market rents toward replacement values. Chartwell’s occupancy is forecast to reach 95 per cent in September 2026, and adjusted same-property NOI grew 11.9 per cent in the second quarter.

The trust has announced approximately $1.4 billion of accretive acquisitions from 2024 to 2026 in sought-after markets, including Montreal, Victoria and Southwestern Ontario, at roughly 30 per cent below replacement cost. These acquisitions are funded through Chartwell’s at-the-market equity program, which has raised over $600 million since late 2024 (with $500 million of additional capacity through 2029), minimizing earnings dilution.

Approximately 72 per cent of its debt is low-cost CMHC-insured mortgages, with a weighted average interest rate below four per cent and a low leverage ratio of 32.2 per cent. Vision believes the strong supply-demand backdrop, accretive acquisitions and efficient access to capital are not fully priced into Chartwell’s units, which look particularly compelling relative to the higher valuations of U.S.-listed seniors housing REITs.

First Industrial Realty Trust (FR NYSE)

First Industrial Realty Trust owns approximately 70 million square feet of U.S. industrial real estate in land-constrained submarkets, led by Southern California (24.5 per cent of rental revenue), Central/Eastern Pennsylvania, Dallas/Fort Worth and South Florida, with 16 million square feet of additional landholdings earmarked for future development.

The U.S. industrial sector is reaching a positive inflection point. The construction pipeline of approximately 237 million square feet is among the lowest levels since 2017 and 65 per cent below its 2022 peak, while demand from e-commerce, supply chain investment and reshoring is driving a recovery in leasing, with national vacancy declining for the first time in four years to 6.5 per cent in Q2 2026, according to CBRE. The data centre boom adds a second-order tailwind, as each gigawatt of new capacity requires an estimated 2-3 million square feet of warehouse space.

A 15-year portfolio transformation has lowered the average age of First Industrial’s portfolio to 13 years and exited non-core assets, while an accretive development program continues to drive NAV growth. Occupancy is forecast to exceed 95.5 per cent by the end of 2026, supported by same-store NOI growth of 5.75 per cent and cash rental rate increases of more than 35 per cent on new and renewal leases.

Vision views First Industrial as mispriced relative to peers operating more mature portfolios, trading near the widest discount to Vision’s forward-looking NAV among U.S.-listed industrial REITs.

RioCan REIT (REI.UN TSX)

RioCan REIT is one of Canada’s largest independent retail landlords, owning urban, necessity based shopping centres and mixed-use properties in Canada’s six largest markets, with the Greater Toronto Area representing 58 per cent of fair value. With no parent company or sponsoring retailer, RioCan is one of the few remaining scaled, independent Canadian retail platforms. RioCan’s properties serve dense, affluent communities, with 277,000 people and an average household income of $155,000 within a five-kilometre radius.

Approximately 86 per cent of the portfolio includes a grocery component, anchoring a tenant base of essential services, grocery, pharmacy, liquor and value retailers such as Dollarama and TJX. Demand is also broadening into fitness, medical services and discount grocery banners, highlighted by the backfill of former Hudson’s Bay space at Georgian Mall with Longo’s, GYMVMT Fitness Club and Mark’s, and at Oakville Place with Nations Fresh Foods.

With virtually no new retail supply, retail committed occupancy reached a record 98.8 per cent, giving RioCan meaningful pricing power: Q2 2026 blended leasing spreads were 23.1 per cent and same-property NOI grew 4.3 per cent, prompting management to raise 2026 guidance to 4.0 per cent – 4.5 per cent. At its November 2025 Investor Day, management outlined a simplified, retail-focused plan targeting average Core FFO per unit growth of 3.5 per cent annually through 2028, despite an approximately 1.5 per cent headwind from refinancing low-rate debt.

The REIT is nearly complete in monetizing its RioCan Living residential rental portfolio, with $1.26 billion of dispositions closed or under contract against a $1.3 billion target, and is using the proceeds to pay down debt. Longer term, RioCan’s centres use only about 25 per cent of their underlying land, providing significant future density potential. Vision believes management’s outlook is conservative, and that RioCan is well-positioned to deliver stronger growth.

PAST PICKS:

During his appearance on BNN Bloomberg's Market Call on September 30, 2026, Andrew Moffs (Senior Vice President & Portfolio Manager at Vision Capital) reviewed his three past picks: Dream Industrial REIT (DIR.UN), Sienna Senior Living (SIA), and GO Residential REIT (GO.U).

1. Dream Industrial REIT (DIR.UN - TSX)

• Assessment & Outlook: Moffs remains constructive on the industrial sector, highlighting that functional urban industrial real estate continues to benefit from strong underlying fundamentals, low vacancy rates, and steady rental rate growth across major urban markets.

• Key Drivers: He pointed to the steady, cash-flow-backed yield and the discount to net asset value (NAV) relative to private market values, noting that modern logistics and distribution hubs retain robust tenant demand even amidst macroeconomic shifts.

2. Sienna Senior Living (SIA - TSX)

• Assessment & Outlook: Moffs highlighted senior housing and healthcare-oriented real estate as one of the most compelling sub-sectors in Canadian real estate, driven by powerful demographic tailwinds.

• Key Drivers: He noted strong operational recovery, improving occupancy levels across their retirement residences, and effective margin expansion as cost pressures normalize. The ongoing imbalance between the growing senior demographic and limited new inventory supply provides a long runway for rental growth and stable distributions.

3. GO Residential REIT (GO.U - TSX)

• Assessment & Outlook: Moffs discussed the deep value proposition in multi-family residential housing, particularly U.S.-focused residential plays where stock prices traded at significant discounts to intrinsic net asset values.

• Key Drivers: He emphasized that multi-family fundamentals remain resilient due to high homeownership costs keeping prospective buyers in the rental market. He views the current price levels as offering downside protection with upside potential as interest rate clarity returns to real estate cap rates.

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Source

https://www.bnnbloomberg.ca/markets/2026/09/30/andrew-moffs-top-picks-for-sept-30-2026/

Google Gemini

Why Bad Stocks Get Worse in November (And How to Spot Year-End Bargains)

 Why Bad Stocks Get Worse in November (And How to Spot Year-End Bargains)

A blog about tax loss selling late in the year...a valuable tool for the value investor.

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I'm going to blog a piece about 'Tax loss selling' in my blog. For the benefit of the readers who don't know what that is, could you give me a working definition?

Tax-loss selling (also known as tax-loss harvesting) is an investment strategy where an investor deliberately sells an asset—such as a stock, ETF, or mutual fund—at a loss to offset capital gains realized from selling other investments at a profit.

By claiming these losses, investors lower their overall taxable capital gains, ultimately reducing their income tax bill for the tax year.

How It Works: A Quick Example

1. The Profit: You sell Investment A and make a $5,000 capital gain. Without any offsetting losses, you owe taxes on that full $5,000.

2. The Loss: You hold Investment B, which has dropped in value and is currently sitting at a $3,000 unrealized loss.

3. The Harvest: You sell Investment B to lock in (realize) that $3,000 loss.

4. The Net Taxable Gain: You subtract your loss from your gain ($5,000 − $3,000). You are now only taxed on a net capital gain of $2,000.

Key Concepts 

• Offsetting Income: If your capital losses exceed your capital gains in a given year, tax authorities (such as the IRS in the U.S. or the CRA in Canada) often allow you to use a portion of the remaining loss to offset regular income, or carry the losses backward/forward into other tax years.

• The Wash-Sale Rule / Superficial Loss Rule: You cannot sell a security for a tax loss and immediately buy it back. Tax rules require you to wait a specific period (typically 30 days) before buying the same or a "substantially identical" asset, or the tax deduction is disallowed.

• Tax Deferral, Not Avoidance: Tax-loss harvesting doesn't eliminate taxes forever—it delays them. Reinvesting in a new asset establishes a lower cost basis, meaning you may pay higher capital gains taxes later when that new asset is eventually sold.

Suggested Follow-Up Topics 

• Specific Country Rules: Tax rules vary significantly between jurisdictions (e.g., the U.S. 30-day Wash-Sale Rule vs. Canada's Superficial Loss Rule).

• Step-by-Step Examples: Practical scenarios contrasting taxable vs. tax-advantaged accounts (like Roth IRAs or TFSAs, where tax-loss selling doesn't apply).

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How long has 'tax loss selling' been around?

 Tax-loss selling has been around for over a century, tracing its roots directly to the creation of modern capital gains tax laws in the early 20th century.

Here is a brief timeline of how the practice emerged and evolved:

1. The Early 1910s–1920s: Creation of Capital Gains Taxes

When the modern U.S. federal income tax was established under the 16th Amendment in 1913 (and Canadian tax framework in 1917), taxing investment gains naturally created an incentive for investors to offset those gains with losses. By the 1920s, tax-loss selling was widespread among Wall Street investors looking to reduce year-end tax liability.

2. The 1921 Wash-Sale Rule: Closing the Initial Loophole

Initially, investors would sell stocks at a loss on one day to claim the tax write-off and buy them back immediately the next morning. To stop this, the U.S. Congress introduced the Wash-Sale Rule in the Revenue Act of 1921. This established the 30-day window, forcing investors to adopt true "harvesting" strategies—either waiting 30 days or replacing the asset with a non-identical security.

3. The 1970s–1980s: Standardized Deductions and Modern Tax Code

Over subsequent tax acts—most notably the Tax Reform Acts of 1969 and 1986—regulators formalized loss limits (such as allowing up to $3,000 of net capital losses to offset ordinary income in the U.S.) and rules for carrying unused losses forward into future tax years.

4. The 2010s–Present: Automated "Tax-Loss Harvesting"

For most of the 20th century, tax-loss selling was a manual, end-of-year task handled primarily by wealth managers for high-net-worth clients. Over the last 10–15 years, the rise of robo-advisors and algorithmic trading automated the process, making continuous, year-round tax-loss harvesting accessible to everyday retail investors.

Useful Framing 

• "Not a New Trick": Emphasize to readers that tax-loss selling isn't a risky loop-hole or a modern crypto-era hack; it has been a core, legal element of tax planning for over 100 years.

• The "Wash-Sale" Context: Explaining why the Wash-Sale Rule was created in 1921 makes for a great historical anecdote that helps readers remember the 30-day rule.

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Does tax loss selling still effect market behavior late in the year, where individual stocks that have been declining all year will sell off even more during the last quarter?

Yes, tax-loss selling still significantly impacts late-year market behavior.

The phenomenon—where stocks that have struggled all year suffer extra selling pressure in October, November, and December—is well-documented in financial markets. However, the way it operates today differs from how it worked decades ago.

How Late-Year Tax Selling Drives Prices

1. The "Loss Momentum" Loop: When a stock declines during Q1–Q3, it becomes an obvious target for investors looking to harvest losses before December 31st to offset their gains. As retail investors and portfolio managers start dumping these underperforming shares in Q4, the increased supply puts additional downward pressure on the stock, accelerating its decline.

2. Institutional "Window Dressing": Mutual funds and institutional portfolio managers often engage in a related late-year practice. They sell off their biggest losers before issuing year-end reports to shareholders so they don't have to show embarrassing, underperforming holdings on their books.

3. The "January Effect" Rebound: Historically, these heavily beaten-down stocks often experience a rapid temporary rally in early January—known as the January Effect—once the artificial tax-selling pressure vanishes and buyers step back in to buy undervalued shares.

How the Dynamics Have Evolved Today

While the late-year dip still happens, modern markets have reshaped the trend:

• Earlier Execution (The November Shift): Smart investors and algorithmic funds know everyone tries to sell losers in late December. To front-run the crowd, tax-loss harvesting now frequently peaks in October and November rather than the last week of December.

• Year-Round Automated Harvesting: The rise of robo-advisors and direct-indexing platforms means tax losses are harvested algorithmically throughout the entire year whenever a stock dips, somewhat smoothing out the extreme December dumping.

• Impact Concentration in Small-Caps: Large-cap, high-volume stocks (like Big Tech) absorb tax-loss selling without moving much. However, small-cap and micro-cap stocks—which have lower trading volume—still experience sharp late-year drawdowns due to tax-loss selling.

Key Takeaways

• The Trap: Buying a stock just because it's down in November can be risky, as tax-loss selling can keep driving it lower through year-end.

• The Opportunity: Value investors often look for high-quality companies whose fundamentals remain solid but whose stock prices were artificially crushed by Q4 tax-loss harvesting, setting up potential bargains for the new year.

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Source

Google Gemini

I Investigate the Current Breadth of the Market with Google Gemini

I Investigate the Current Breadth of the Market with Google Gemini

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One of the few market indicators I like to watch is market breadth. that being the case, could you please explain to me the current status of 'the McClellan Summation Index of the NYSE?

The NYSE McClellan Summation Index (NYSI) serves as an intermediate-to-long-term running tally of market breadth. Because it is calculated by adding each day's McClellan Oscillator reading to the previous day's total, it tracks the cumulative momentum behind the Advance-Decline line rather than just daily fluctuations.

Core Conceptual Framework

Depending on the charting platform used (e.g., standard vs. ratio-adjusted models), the Summation Index operates around key threshold levels:

• Directional Slope: The direction of the Summation Index is often more critical than the absolute raw number. A rising line indicates persistent net accumulation (advancers consistently beating decliners), while a declining line signals distribution.

• The Zero / Neutral Mark: Crossing above the zero baseline (or the +1000 level on traditional unadjusted charts) signals a transition into an overall bullish environment, while dipping below indicates negative broader momentum.

• Extreme Thresholds:

  • +1,000 or higher: Signals an overbought condition or extreme breadth expansion. During major bull thrusts, it can stay elevated above $+1,000$ for extended periods.

  • -1,000 or lower: Indicates an oversold condition. Readings dropping down toward -1,000 or lower often mark selling exhaustion and potential market bottoms.

Key Mechanics to Watch

1. Divergences with Major Indices:

   • Bearish Divergence: If major market averages (like the S&P 500 or Dow) push to new highs while the Summation Index makes a lower high, it indicates that fewer constituent stocks are participating in the rally. This narrowing market structure is a classic warning sign of an unsustainable top.

   • Bullish Divergence: If indices make a lower low but the Summation Index sets a higher low, it indicates underlying accumulation and improving participation before price turns upward.

2. Moving Average Crossovers:

   Applying a 10-day or 20-day exponential moving average (EMA) directly to the $NYSI helps smooth out short-term noise. When the Summation Index turns up and crosses above its 10-day EMA, it often generates a reliable confirmation signal for medium-term rallies.

3. Ratio-Adjusted vs. Traditional NYSI:

   Because the total number of listed issues on the NYSE changes over decades, many modern data feeds use Tom McClellan’s Ratio-Adjusted Summation Index (RASI). On a RASI chart, $+500 serves as the key bull/bear dividing line: a move above $+500 signals an active breadth-supported bull trend, while dropping below $+500 indicates deteriorating underlying health.

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Sorry, I should have stipulated I want to check in with the ratio-based version of this indicator of the NYSE. What is it telling us at this moment in time?

 The Ratio-Adjusted McClellan Summation Index (RASI) normalizes daily net advances ({A - D}{A + D} \times 1000) to smooth out the effect of changing numbers of traded issues over long time horizons.

On a standard RASI chart, +500 serves as the critical "escape velocity" threshold:

• Above +500: Confirms that broad-based liquidity and participation are sufficient to support a durable, multi-month bull move.

• Rejections / Failures below +500: Signal a lack of broader participation—indicating that an index-level rally is being driven by a narrow group of mega-caps while underlying market breadth deteriorates.

• Below 0 (Negative Territory): Reflects sustained net distribution across the broader market.

Current RASI Market Context

The RASI has been displaying a classic bearish breadth divergence relative to major headline indexes.

1. Failure at Escape Velocity: The RASI attempted a rally earlier in the cycle, reaching +471 before rolling over without crossing the key +500 threshold. It subsequently formed lower lower-high peaks (near the +366 level).

2. Divergence with Price Highs: While broad indexes (like the Dow and the NYSE Composite) pressed toward new highs, the RASI failed to confirm those moves. This indicates that market gains are being carried by a shrinking pool of large-cap leaders while the average equal-weighted NYSE stock is quietly lagging behind.

3. Negative Short-Term Momentum: Driven by recent negative daily McClellan Oscillator readings, the underlying Summation Index trajectory remains sloped downward, reflecting a lack of new net liquidity flowing into the broader equity universe.

Key Levels & Confirmation Signals

• What Bullish Confirmation Looks Like: For the broad market to clear this liquidity deficit, the RASI needs to turn back up and push decisively above +500. Until it clears +500, the underlying breadth structure remains vulnerable to retesting lower levels.

• What Bearish Escalation Looks Like: A breakdown below the zero line on the RASI would shift intermediate market breadth from "narrow/divergent" to outright negative, increasing the risk of a broader index-level correction.

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I once read that nothing really bad ever happens when the RASI is above 0. Is the Rasi of the NYSE still above the zero line?

Yes, the NYSE Ratio-Adjusted Summation Index (RASI) is still above the zero line.

While the market's broader breadth structure has cooled off significantly from its high points earlier in the cycle, the RASI remains in positive territory.

However, looking strictly at whether it is above or below zero misses the nuanced warning sign the RASI is currently giving:

• The +500 "Escape Velocity" Failure: For Tom McClellan’s RASI, the zero line separates general positive breadth from negative, but +500 is the critical threshold for true "escape velocity". When the RASI turns down before reaching +500—or forms lower highs below it—it indicates that while the market isn't in outright panic, it lacks the broad-based liquidity to support a healthy, widespread expansion.

• Current Bearish Divergence: The RASI topped out at +471 and rolled over, subsequently making a lower high around +366. During this same window, major headline indexes pushed higher, creating a textbook bearish breadth divergence.

Why "Nothing Bad Happens Above Zero" Is a Useful (But Tricky) Rule

The adage that "nothing really catastrophic happens while RASI is above 0" holds true in the sense that major multi-month bear market meltdowns (like 2008 or early 2020) require the RASI to plunge well into negative territory—often down toward $-500$ or lower.

The structural risk, however, is lag:

1. The RASI is a smoothed, cumulative intermediate-term indicator. By the time it actually crosses down through the zero line, a correction is already well underway.

2. A failing RASI that stalls out below +500 while remaining above zero is often the precursor phase—it signals that the rally's "engine" is down to just a handful of heavyweights (mega-caps), making the broad index vulnerable if those few leaders finally stall.

As long as the RASI stays above 0, the overall market retains a baseline buffer, but its inability to clear +500 warns that underlying liquidity is thinning out behind the scenes.

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Could you please give me the current status of the RASI of the NASDAQ?

The NASDAQ Ratio-Adjusted Summation Index (NASI) presents a noticeably different structural setup than its NYSE counterpart (NYSI), owing to the unique construction and long-term quirks of the tech-heavy exchange.

Key Mechanics of the NASDAQ RASI (NASI)

1. Structural "Downward Bias" Constraint:

   Because NASDAQ listing requirements are less stringent than the NYSE's, the exchange sees a far higher volume of speculative micro-caps, penny stocks, and unpromising initial public offerings. Over time, these weaker components quietly bleed out, creating a permanent structural downward bias on the NASDAQ Advance-Decline line and its RASI.

   • The Takeaway: The NASDAQ RASI sits below zero far more frequently than the NYSE version without necessarily signaling an imminent index crash.

2. The +500 Escape Velocity Limit:

   While the +500 mark serves as Tom McClellan’s threshold for the NYSE, the entire NASDAQ universe rarely clears +500 except during massive, explosive bull surges. Many technical analysts instead focus on:

   • The NASDAQ 100 Summation Index (NDX): Because the NDX tracks a fixed set of ~100 mega-cap/large-cap issues, analysts use +50 as the "escape velocity" signal for tech leaders.

   • The Zero-Line Crossover: On the full NASI, crossing above zero is a reliable sign that broad tech participation is genuinely healthy.

Current $NASI Status & Technical Reality

• Persistent Breadth Deficit: Driven by the rotation out of spec-tech and mixed performance across broader semiconductor and mid-cap tech stocks, the $NASI has struggled to establish an extended move into deep positive territory.

• Extreme Concentration Distortion: The headline indexes (like the Nasdaq-100) have been repeatedly propped up by a very narrow cluster of mega-cap tech leaders. Underneath the surface, the broader pool of NASDAQ-listed stocks has experienced lackluster participation, keeping the NASI suppressed near its baseline/lower range.

• Moving Average Trend: The 10-day and 20-day smoothed direction on the NASI remains weak. Without a sustained series of high net-advancer days ({A - D}{A + D}), the index cannot build the cumulative momentum needed to stage a structural breadth breakout.

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Source

Google Gemini

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Postscript

As a rule I don't let the market direction influence my investing. However as Howard Marks observed, it's important to notice where we are in the market cycle. Bear in mind the last major low was back in the fall of 2022. That's four years ago now. So it might be a good time to play a little more defensively. For myself, I usually just hold on to everything and ride things down, then ride them back up when the market recovers. The market will test your nerve both on the upside and especially the downside.