Tuesday, December 31, 2013

REIT's To Buy or Not To Buy This Year

I, like many investors, were drawn toward REIT's due to the high dividends and rather constant charts until recently but the question is did the REIT bubble pop or will we see recovery in the coming year.  REIT's, for those of you who aren't familiar, are real estate investment trusts. They invest in real estate and/or mortgages, have special tax breaks, and usually pay out a considerable portion of their profit as dividends to the stock holders.  I have a few in my portfolio, MFA, NLY, ARR, and at one time WAC which I sold after they were no longer classified as an REIT.

So far the dividends that I have received have covered the recent loss in value.  So what does the future hold for these high dividend stocks?  I believe that given the recent drop in price now would be a great time to buy.  I think the economy is headed upward in 2014 which will bring even more stability to a still recovering housing market.

With the dividend percentage being as high as it is on these particular stocks it gives you a little more cushion when the value takes a dip.  As of today, ARR is paying over 15%, NLY is just over 12%, and MFA is over 11%.  At these rates, even if the REIT market holds steady (which it should), you are still making well over 10% a year.  Add into that the probability of an increase in value it's a no brainer for me.  Even in the off chance it does drop in value, it would have to completely plummet to reach the pitiful rates that CD's and money markets are paying out.  If you are going to invest in CD's you might as well hide your money under your mattress, but that's another topic.

In closing, I believe if you do your research and chose a reliable REIT you won't go wrong this year.  So buy, buy ,buy on REIT's in early 2014.


Monday, December 30, 2013

Warren Buffett on Simple Retirement Advice

I found this article on The Motley Fool and thought it was excellent advice on picking investments that have overall reduced costs associated with them.

Warren Buffett's Super-Simple Retirement Advice
Warren Buffett might as well be king of the investment industry. He produced the best returns the world has ever seen working from his house in Omaha, not a desk on Wall Street. And for that reason, so many people want his advice on how to invest for retirement. They want to hear from someone like them -- someone who doesn't spend every waking moment in Manhattan. What would Buffett do? At the 2004 Berkshire Hathaway (NYSE: BRK-A ) (NYSE: BRK-B ) shareholders meeting, Buffett was asked by one investor if he should buy Berkshire, invest in an index fund, or hire a broker. Buffett delivered with his typical, common-sense rationale: "We never recommend buying or selling Berkshire. Among the various propositions offered to you, if you invested in a very low cost index fund -- where you don't put the money in at one time, but average in over 10 years -- you'll do better than 90% of people who start investing at the same time." An index fund? That's what the best stock picker in the world recommends? Yes, and it wasn't the first time he answered with such simplicity. In another question-and-answer session, Buffett made his stance plain and clear: "If you like spending 6-8 hours per week working on investments, do it. If you don't, then dollar-cost average into index funds. This accomplishes diversification across assets and time, two very important things." So, let's get to the specifics. What's Buffett's favorite index fund? "Just pick a broad index like the S&P 500. Don't put your money in all at once; do it over a period of time. I recommend John Bogle's books -- any investor in funds should read them. They have all you need to know. Vanguard. Reliable, low cost. If you're not professional, you are thus an amateur. [F]orget it and go back to work." Why is Buffett so keen on index funds? They're cheap. In fact, Vanguard's S&P 500 ETF (NYSEMKT: VOO ) provides a way for investors to own a slice of 500 of the largest businesses traded on the public stock markets, including Berkshire Hathaway, at a cost of just 0.05% per year. On a $100,000 investment, fees would tally to only $50 per year, compared to $1,310 for the average large-cap mutual fund. Over time, lower fees and expenses help your money compound faster. Just look how Vanguard's low-cost ETFs stack up to the alternatives: Add in Vanguard's other popular ETFs, like its Vanguard FTSE All-World ex-US ETF (NYSEMKT: VEU ) fund, which tracks international stocks, and its Vanguard Total Bond Market ETF (NYSEMKT: BND ) for bond exposure, and you'll have a more balanced investment portfolio than many who hire the help of a broker. Avoid this big mistake Buffett's pretty keen on helping people avoid big mistakes, just as he's all for helping investors make better decisions. Saying it as simply as he could, he opined on how having cash is one of the worst investments you could ever make: The one thing I will tell you is the worst investment you can have is cash. Everybody is talking about cash being king and all that sort of thing. Cash is going to become worth less over time. But good businesses are going to become worth more over time. Of course, that's not to say that having a cash buffer for emergencies is a bad thing. However, having piles of cash -- tens upon tens of thousands of dollars in cash -- is a great way to guarantee a terrible return on a very large pile of money. More thoughtful insights from the Oracle of Omaha Warren Buffett has shared wisdom worth billions in his annual letters to Berkshire shareholders. Luckily, his smarts are free for the taking. You can tap into the best of Warren Buffett's wisdom in a new special report from The Motley Fool. Click here now for a free copy of this invaluable report. Fool contributor Jordan Wathen has no position in any stocks mentioned. The Motley Fool recommends Berkshire Hathaway. The Motley Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. Source: The Motley Fool

Saturday, December 28, 2013

Stocks of interest in 2014

Looking ahead to the new year brings speculation as to which market segment will prevail as the best investment choice. I have a couple I would like to share today. First I will start with NBG - National Bank of Greece. I think this one we see marginal increases throughout 2014 but will be a good one to hang onto for the years to come. Not a get rich quick stock, but one to keep for the long term. The Greek economy shows signs of improvement and NBG has stated some interesting tactics to reduce expenses and increase revenue. Keep an eye on this one this year. Second is XIN - Xinyuan Real Estate. They build apartment complexes in middle sized asian cities and as of right now have a good P/E ratio and a positive looking future. XIN is currently 5.49 and I wouldn't be surprized to see over 7.00 in 2014. So on a recap NBG I would buy under $6.00, and same for XIN buy under $6.00. I have a sell order at $7.50 for XIN (picked it up a little over $5.00) and am holding onto NBG for a while.