I like how you can take profits and buy hard assets at value prices. I did sort of the same thing in 2012, taking 20% out of the market and buying a Duplex which I bought below fair value (probably 65% of fair value).
Four years later, mortgage paid off, $70K rehab fix-up completed and turned into Tri-Plex w/ all units rented that generate a 12% cap rate based on cost plus fix-up. Zillow shows property 50% higher than my original price plus fix up cost basis.
So, hard asset value trumps spec stock values, especially when those assets are located in China. It's always good to diversify and many of the very successful investors, made their money in real estate.
FWIW, I started a small position today in AFCO that was acquired by FPI (I already own a few shares). These are Ag Reits that buy U.S. farmland and generate FFO from renting the land to farmers. It's also a long term play on the real-estate, future Ag services (similar to what Ag coops provide locally), benefits from strong $US and a hedge against future inflation. You get a 5% dividend while you wait.
So, for me, I see value in real estate (ie REITs) and in particular, farmland but this is for the long term (10 or more years).
Good value investing
EKS |
