NexPoint Residential Trust: Risks Tilted To The Upside Heading Into 2026

Core Insights - Residential REITs have faced significant challenges in 2025 despite ongoing Federal Reserve rate cuts and expectations for further easing in 2026, which typically would boost demand for defensive alternatives [1] Group 1: Market Conditions - The ongoing Federal Reserve rate cuts are expected to continue into 2026, which could increase demand for defensive investment alternatives [1] - The performance of residential REITs has been notably poor in 2025, indicating a challenging market environment for this sector [1] Group 2: Investment Strategies - The investment approach discussed includes a focus on fundamental long-term perspectives, particularly in REITs, preferred stocks, and high-yield bonds [1] - The strategy also involves combining long stock positions with covered calls and cash secured puts, reflecting a tactical approach to managing investments [1]