Q........
Hi Tom,
Read your #15540 post.
Message 15625813
I do a lot of Reits. My favorite is WRE.
What Reit do you have? Are you Aiming it. I haven't because I like the dividend or is my thinking off?
I tried to post this in SI as a response to your post. I am a member but I received a message that a regular member can not post a response. What do I have to do to post?
Always enjoy your newsletter and responses. Good aiming.
Don
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A.........
Hi Don,
I can't think of a reason why you couldn't post to SI. Maybe their server was clogged up or something.
W.P. Cary (WPC) is the name of the REIT. Rather than choosing it, it was sort of "chosen" for me! It is in an estate account. It had been a variety of limited partnerships managed by Cary Reality. They consolidated a bunch of them into one place and under the guise of a REIT. This all happened and it came public at about $22/share.
I've been AIMing it ever since! However, it's been a one-sided AIM happening! All Buying so far. As long as the yield seemed reasonably secure, I used the cash in the estate to continue accumulating shares at nicer and nicer apparent dividend. So far, so good.
The shares are now back to just about where I'll start to sell off a few. My intent is to run rather high SAFE values with it considering its relatively low volatility. This is because I really only want to buy shares when they are deeply discounted and part with some when they are relatively over-valued. So, I believe I'm running 10% SAFE on both the buy and sell sides. Currently it's set to sell the first shares at $21.25 (yield at that price would be about 8.3%) and buy at $16.32 (apparent yield of 10.8%). So, while I hold the shares we make a nice yield. When we sell a few, we make a fat LIFO gain (about 28-30%) and then park the $$$ at about 5% until they are recycled.
I plan on using "vealies" to cap the selling at about 85% invested, 15% Cash Reserves. Since this is primarily an income producing asset, this is just fine and keeps my interest in an otherwise sleepy investment. If I'd chosen a REIT all by myself, I don't know if it would have been WPC, but since the estate was already stuck with the il-liquid LP's, I really had no choice.
If there was a surprise, it was that when the market came un-glued WPC and other REITS didn't soar when their yields were so generous. Even my L-T Bond fund (ACG) moves around more than this with about the same yield range. I use close to the same settings on ACG, btw.
It's interesting to note that the yield of these vehicles seems to be between 4% and 5% above the prevailing interest rates. So, if I were to see the apparent yield drop to just 6%, I might sell a little longer with AIM (unless st rates were down to 1% or 2%!). I'd have to plot this to be sure, and it might be interesting to do.
Best regards, Tom |
