Wednesday, 24 September 2014

From Super Reits to Stupid Reits lol

Recently last month I took a gamble and purchased $150k worth of Reits on margin LINK

Ohhhhhhh how it has not been going to plan so far.

$152,669 has plummeted down to $146,045
That is a $6,624 loss so far or 4.3%. Wow that is a big drop for a time period of only 28 days in the so called safe investment of real estate.

Also I have paid $229 in interest for my (3%) margin account to borrow the money to invest.

On the bright side I have received $914 in dividends so far from just this play as they are all monthly payers but whats the point really to earn 7.5% in dividends a year when your investment goes down 10% lol.


In Conclusion

So far it has been a bad investment but I am not worried about it just yet. It is early as its only been a month. I will give it a close watch to see how things shape up in the coming months and continue to pay down my margin debt from dividends received. I will make periodic updates on just the REIT play to keep you people informed.


I
In a splurge purchase I have purchased a new phone which will not be here till mid next month. It is a lot of money for a phone. Sure I could get one subsidized from my carrier but I really dislike contracts as my last provider really took me to the cleaners as I tried to switch. I dont spend much on myself and its an item I use very often. Plus my last iphone 5 lasted me over 2 years now which is the longest I have ever had a phone without upgrading. I am hoping for this new phone to last another 2 years thus the apple care warranty. I am firmly against extended warranties but I feel justified with this one as phones are very accident prone and I will be running this one without a case so it can fit in my pocket still lol. This is the second most expensive phone I have ever owned. WHATTTT u say???? Yes In 1996 I spend over $1600 on a Motorola StarTAC. LOL How far have we come. The StarTac was the leap into the future at the time before texting was a thing and 50 cents a minute was the going rate for a phone plan.



Other News

I have been playing with about 100k in my US margin account. I have been selling Apple puts for a few dollars below market price and the 300 shares of Apple I do have I have been selling covered Calls for a few dollar above. Overall I am bullish on Apple and have been playing the stock to take advantage of it.

I still hold 600 shares in my retirement account I am not touching or playing options with. My max 100k play is to see what kind of money I can make options trading writing aggressive options.

In my coming posts in a few days I will give a Grandma Olga ETF update LINK
Also a project debt Ali update LINK








So how have your guys plays , buy,sells and options been? Also what is the most you have spent on a phone and what has been your favorite. I think my old time favorite was my Motorola black MicroTac elite phone. Was great with slim detachable batteries and looked very classy at the time.

36 comments:

  1. The beauty of an income producing asset like REITs is that even an initial drop can easily be tolerated. Im sure the investments will be a good run over the long haul.
    I remember that SuperTAC phone - hah that sure was a nice jog down memory lane. I remember my cousin who owned it showing it off to me and me going - "wow. cool phone".

    Im lying low and rebuilding my cash positions - so no new ivnestments for me.

    cheers
    R2R

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    1. Yeah nop new investments for me for a little bit other than my option playing. When I first saw the Star tac I was like Woah is that a phone? Its straight outta star trek! Oh men and gadgets! When will we learn!

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  2. AG,

    Leverage definitely works both ways. You are a long term investor, so I think you will be ok once rates equalize a bit. You can also add to your positions if you see further weakness, no different than any other holdings.

    Keep grinding away!

    MDP

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    1. Yeah I would consider adding to position if it drops below 10% Depending on margin available of course!

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  3. I have a couple REITs that are sinking too... but I'll continue to hold till it rebounds. Hopefully, your passive income will make up for the current downturn in time. Wow, we sure have come a long ways in technology. I think $1300 Iphone vs $1600 Motorola is a great deal. You'll make great use out of it day in/day out.

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  4. Yeah would be silly to sell at this point. If anything add. I use my phone quite a bit in a day and it replaces my pc most of the time. Thanks for droppin by.

    Great blog u got going and keep on grinding fellow Vancouverite!

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  5. Whew, quite the ride for sure! And I think playing the options game with Apple is a good move, and it doesn't hurt you are playing your part in building their next quarter's earnings! :)

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    1. Lol if every apple investor can buy a new iphone and then we are set for a 200$ price target! lol. What I also like with next quarters numbers is that the iphone 6 has higher profit margins than last generations so combined that with record breaking sales we are going to be sitting pretty soon enough.

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  6. Thanks for the updates on your REITs. We had a bag car phone in the 90's. I still remember my husband calling into a radio talk show as we were driving down to Florida, just because he could.

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    1. lol. never had a car phone, actually one came in a Mercedes I had but I never activated it. My dad use to have that old school brick phone. That thing was like 10 pounds!

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  7. My REITs have also taken a hit this past month. Do you have a exit plan for the margin account? Best to give yourself a lower limit as to protect yourself from any major losses.

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    1. I got plenty of margin room left so not too worried about getting a margin call. I am thinking of moving my account over to interactive brokers to further reduce my margin account fees. For the time being I will pay down my margin account from all my investments and see how things go.

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  8. I am guessing you will profit after a few months of dividends from your reits. I was looking at buying O but I am not sure how far reits will be dipping. My guess is that this is just thd beginning so I will keep a close eye on O, DLR, and ARCP for a good buying opportunity. Thanks for sharing and nice phone!

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    1. YahI too have been looking at O and ARCP, maybe I will grab those at some point as well

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  9. I have been looking at ARCP for about 9 months, but I have been hesitant to buy because of the situation with the economy. I know the economy is said to be growing, but it seems to me that the little guy is still having a tough time and ARCP has tons of tenants that require lots of input from the middle class. So far, the middle class is being squeezed and who knows how far they are willing to go before really tightening the purse strings. That is what scares me about ARCP.

    As far as the phones, I went from Apple 3gs to Samsung Note3 and am going for the Note4 when it comes out. I made an excellent choice, and I am 100% satisfied. It is a spectacular phone.

    I have been checking out your site for a while. You seem to be hitting on all cylinders.

    Keep cranking,

    Robert the DividendDreamer

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    1. Yah new note 4 looks very nice. If i wasnt loving the apple ecosystem i would have went with a note 4 or s5

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  10. AG,
    The REIT trade is fun to watch. The annoyance for you must be that when the Fed speaks, the REITs hit volatility. I own ARCP and HCP already and would like to add O soon. May get a chance to buy in lower, we'll see. As for the phone, I "want" one, but don't "need" a new iPhone 6. I'm torn at the moment. The big issue for me is storage. I take videos of my kids and 16GB fills up very fast. I really want that 128GB, smaller version, not the Plus. I'm pretty happy with my 5, so I'm starting to think I may wait until the 6S comes out next year. By that time payments will be more mature and hopefully more widespread. Still like AAPL stock for now.
    -RBD

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    1. Perhaps wait a few months and get the 6 128gb used and save couple hundred bucks. I take lots of video of the kids too, my old 64 gb was filling up.

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  11. REITs should bounce back, especially now the interest rate isn't going anywhere for the next little while.

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  12. I have been into and out of mREITS a few times. I was in them a few years ago and hopped out when the interest rates started going back up. It was pretty good timing because they got taken out back to the wood shed shortly after. I've picked up a few mREITS again semi-recently. One was back in December which was pretty good timing because there was a dip then, and then another a few months ago. The last one hasn't been so good for me, but I'm also not trying to jump in and out of the game a lot here.

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    1. I havent researched mortgage reits enough to get into them. The yield looks great but often its at the cost of the share price declining. Any solid mortgage reits u know worth looking into?

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  13. The nice thing about your REIT buys on margin is that theres some diversity in there which is nice in that your risk is more spread out. Its actually pretty cool you picked up the new iPhone on impulse, definitely wasn't expecting that! We all need a splurge purchase once and a while

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    1. Ya I told myself I wouldnt buy my self the iphone 5s from last year. 2 years restraint without buying a new phone has been a test for me. lol. It is one luxury I afford for myself.

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  14. Nice grinding you had there will the REIT income. I'll be following to learn a thing or two.

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    1. Hopefully once I pay down the margin, this income will be supersized

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  15. Pros and cons to leverage...if you are a long-term investor, simply have the dividends pay the interest and then some on the debt.

    I don't borrow to invest since I have a fat mortgage. Once the mortgage is done, I will likely borrow a bit and invest.

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    1. Yah since I dont have a mortgage I consider the leverage as kinda like a mortgage! As long as I dont overdo the leverage I should be fine

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  16. Damn, hope I can move that much money someday! Definitely ballsy to invest that in REITs, especially on margin. I personally would never use margin, because it's a form of debt, and I hate that. But you have a long time frame, I'm sure it'll be okay in the long run. Best of luck.

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    1. I am pretty firmly against debt too but its only about 10% of my networth so its a measured risk.

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  17. Keep pushing AG! REITs will eventually bounce back up and seeing as how you are a long term investor you should be in a good position, also picked myself up an iphone couple weeks back.....iphone 4s haha. the new iphone 6s are nice but seeing as how they bend so easily leaves a weird feeling in my stomach. good luck good sir!

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    1. The bending news is a bit overblown. Now my mom wants my old iphone 5. The hand me down process begins!

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  18. Thanks for giving us this update regarding your REIT margin play. If I recall when you first posted news of this trade you were very well aware of the potential risks associated with this play. REITs all took a bath the last couple of weeks. Curious to know the end result.

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    1. Will be interesting to see where we are when interest rates finally do rise.

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  19. A friend of mine actually still has that motorola brick phone. We are getting bigger phones these days, but not quite the heft.

    Keep cranking,

    Robert the DividendDreamer

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    1. I think imma look for my dads old brick phone. Thing was a weapon! Maybe I will make it into a statue piece lol

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