REITS down 60-70% and when dividends come back

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  #1  
Old 03-25-2020, 08:56 PM
CoachKandSportsguy CoachKandSportsguy is offline
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Default REITS down 60-70% and when dividends come back

to the recent past, the yield will be about 30% on your investment. . . always diversify, but that's where lots of smart money is going.

sportsguy
  #2  
Old 03-26-2020, 08:48 AM
Boomer Boomer is offline
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Default All dividends are not created equal

Quote:
Originally Posted by CoachKandSportsguy View Post
to the recent past, the yield will be about 30% on your investment. . . always diversify, but that's where lots of smart money is going.

sportsguy
Perhaps I am a mere bumpkin, not at all savvy about REITs. But my gut says a simple “No.”

I do not think I would want to own commercial property at this point or even in the future. Look around. Too many moving parts.

Will this telecommuting thing catch on more after we get through this crisis?

Even telemedicine might become more of a norm.

What about the gaping maw of empty commercial property that we see in ‘burbs across the country? In-person retail has been suffering for years.

How long could those big dividends be sustained?

Everything is taking a huge hit right now. But will REITs be able to make much of a comeback? If any?

Question: Am I correct that dividends from REITS are not taxed in the same way as dividends from other dividend-paying stocks? Aren’t dividends from REITs taxed the same as regular income — without the tax advantage that other dividends get?

(I have not thought about or read about REITs for years so I could be remembering wrong about the tax thing.)

Disclaimer:

I have no letters after my name that have anything to do with finance. My opinion on the stock market is worth exactly what you are paying for it.

Last edited by Boomer; 03-26-2020 at 08:58 AM.
  #3  
Old 04-02-2020, 03:12 PM
CoachKandSportsguy CoachKandSportsguy is offline
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Default Your honesty about your knowledge level is refreshing!

There are many kinds of reits, not all invest in commercial real estate. So you are correct with the current situation at the moment. However, the investment thesis is that the government will come in and backstop a lot of mortgages, as a way to prevent to whole industry from imploding. In that case, there will be an avoidance of bankruptcy. But the point is also about the future when the economy recovers, people will still need to rent, probably more than now, and when the payments start to come back, say 80% of the current rate, and you paid 70% off of that price, then when the price comes back, you are making a 25% +/- return annually on your original investment. The key is to put a small amount into the position, say 1% to 2% of your portfolio per position, so say 5%.

Then the future income in 2-3 years will be very nice as well as the capital gains.

sportsguy
  #4  
Old 04-02-2020, 03:43 PM
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manaboutown manaboutown is offline
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I bought common shares in several self storage REITs back when they dived in 2009. One came down from about 30 to hit 2.02. I bought some of it at 2.6. It went back up to about 36 and is now down to 25-26 and paying over 5% on its current price which is over 50% on what I paid for it. I bought two others which have done about half as well. This one was highly leveraged and therefore much riskier at the time. I could have put ten times as much into them at the time but I am a cautious sort.
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  #5  
Old 04-03-2020, 05:30 AM
CoachKandSportsguy CoachKandSportsguy is offline
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Default Genius!

manaboutvillages:

Well done! Yes, smart with the small diversified amount. You won't get rich with a very diversified portfolio, but you will grow consistently and will have fewer drawdowns

  #6  
Old 04-03-2020, 07:37 AM
stan the man stan the man is offline
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When I need my shoes fixed I go to a Shoemaker when I need advice on investments I do not go to TOTV. Bought apple for $10 in 2006, still paying tax on dividends
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