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Strategies & Market Trends : Dividend investing for retirement

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To: Rattle_Shot who wrote (7939)	2/25/2011 4:25:50 PM
From: E_K_S	Read Replies (2) of 34328

Hi Rattle_Shot - IRET is new to me. When looking at where their properties are located and as described in the Yahoo profile I was surprised to see such concentration in the Midwest especially for a publicly traded REIT with an EV of $1.7B. I thought that some of that oil money might find it's way to some of their properties (maybe 25% coverage: 2.9% Montana, 13.1% ND, 2.5% SD, 2.5% Wyoming and perhaps 5% Southern Minnesota). At the very least IMO, it should help stabilize the real estate values w/i a 500 mile range of the Oil boom zone located in the Williston & Dickinson area. My main reason for my small purchase was I think real estate values are near their lows and rents could possibly move higher if some of that Oil money flows their way. Investors Real Estate Trust (IRET) came up on my list of companies that provide a 5% discount on dividends reinvested. It's my plan to have all my dividends reinvested in their DRIP program. So the portfolio should benefit from this program, perhaps juicing my annual return by 0.50%. So here is my strategy. Today's buy represented a 1.2% portfolio move. I expect only a 10% to 15% appreciation in the price of the REIT shares over my holding period which is typically three years. Most of my gains should come from their dividend distributions (historically around 7.5% annual) and perhaps another 1/2% annual from their DRIP program. Therefore, I am looking for an 8% annual return and if held for 3 years another 3%-5% from capital gains (ie share price appreciation). That translate into 11% - 12% annual return. IRET's property portfolio should also provide an inflation hedge if rates move significantly higher. I have been wrong many times on my picks and may be wrong here. EKS

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