CONSUMER DRIVEN INFLATION??
- Thread starter TuTu Monroe
- Start date
will we have some inflation yes but come on the price of gold is becoming absurd. Total bubble and most of us on here have already seen what happens to bubbles (tech, real estate, solar, etc)..
I know the dollar is pretty beaten up right now and we owe a ton of money but bottom line is where is there a safer currency? The Yen? Japans about to collapse. the Euro? LMAO please.. the corruption dealing with a multi country currency.
Fact of the matter is that the US is still the powerhouse in the world like it or not and thus the safest currency in the world.
I know the dollar is pretty beaten up right now and we owe a ton of money but bottom line is where is there a safer currency? The Yen? Japans about to collapse. the Euro? LMAO please.. the corruption dealing with a multi country currency.
Fact of the matter is that the US is still the powerhouse in the world like it or not and thus the safest currency in the world.
Topspin
Verified User
Always has been like that, it's just excellarated with the net.
Topspin
Verified User
haha.. i doubt it. i took a bath with solar lost over 6figures.. tho i still have the shares my ira but its in ruins as i tried to double and tripple down to lower my cost avg.
Come on im a 1974 baby.. that means i graduated college in 97 just in time to get a sweet start to a career but then to sit on the flattest 10years of market action since who know when. I have a good base but im in the lost generation.. will always be paying for some other generation.
Here is a good chart to follow the rates
http://www.bloomberg.com/apps/cbuilder?ticker1=MTGEFNCL:IND
i just don't put all my eggs in one basket anymore.. and what i mean by that is not in just savings.. Instead i do a modest amount but also go after paying off my real estate and other debt as fast as possible and some dabbling in small non market investments. As i said house #1 will be paid off at age 45... Once thats done I can become a taker instead of a giver and leave corp world. I figure at my age I have already contributed my share in taxes that 95% of people pay in there entire lives... it will be my turn to start taking.
hell if i had the kind of investments you had id be all about buying income producing.. there are some crazy deals on dividend paying stocks right now.. were better before but still like 30-40bucks for a 5% dividend paying stock.. hell stick 2M into a 5% and make 100k in dividends.
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The Almighty
I would be cautious on those Real Estate ETFs. Those funds do not raise cash and many of the properties in those portfolios are going to need refinancing. If they cannot get the financing due to the tight credit market, they could be forced to liquidate properties at an inopportune time.
Go with the public NON-traded REITS if you are looking for income and cap appreciation potential. The income is not the double digit that you are seeing on the publicly traded REIT ETF's, but the total return potential is better in my opinion given that the non-traded are currently raising cash and BUYING in a down market that is coupled with low interest rates.
Keep in mind... the non-traded also give you a pretty good inflation hedge.
Topspin
Verified User
double digits, shit the one I'm buying is like 5% VNQ it's the vanguard entire market. The big boys in it look ok not too much debt.
Freak, I know less than zero when talking to you about this so it's kinda over my head.
Chappy, just buying $40,000 in corp bonds and about $20,000 in treasury's for my wife's IRA felt very wierd.
I've been a 100% stocks guy for 25 years and just started doing REIT's over the last couple years.
So I'm learning to diversify like a stock junkie should, just sticking my toe in though.
Freak, I know less than zero when talking to you about this so it's kinda over my head.
Chappy, just buying $40,000 in corp bonds and about $20,000 in treasury's for my wife's IRA felt very wierd.
I've been a 100% stocks guy for 25 years and just started doing REIT's over the last couple years.
So I'm learning to diversify like a stock junkie should, just sticking my toe in though.
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The Almighty
You may want to look at the debt of those top ten holdings again. Only two are below 50%. (PSA is at 3% and VTR about 35%)
Two are underwater based on current market valuations (EQR and VNO) to debt.
The remainder are between 65% to 85% debt to market cap.
With the exception of PSA... (and to a lesser degree VTR) the top ten holdings could have potential debt refi issues.
The other problem is that if one or two in the sector start having problems, people will bail on the sector as a whole (typically)... which is what we saw last year.
Add to that the fact that the non-traded are kicking off 6.5-7.25% and you are also getting lower income for greater volatility. If you are truly buying for the income, you should look into the non-traded. The downside to the non-traded is the lack of liquidity. They are not designed to be traded. They are designed to be held for typically 4-8 years. You do not want to put any money into them that you may need within the respective investment time frame.
Just my take on REITs.... take it for what it is worth...
Topspin
Verified User
It's worth a lot, like I said your the professional and I'm the home gamer.
I was looking at debt to asset book value and most were well under 50%.
4 yrs, I can't do low liquidity. I've made more than a few thousand just jumping in and out of VNQ on triple digit moves up or down. So while the original intent was to get reit exposure and the dividend, I always will sell something if I have a short term gain which I was hoping to achieve in the long term.
I will be quarded more closely and buy less shares next time based on your concerns though. Thanks
I was looking at debt to asset book value and most were well under 50%.
4 yrs, I can't do low liquidity. I've made more than a few thousand just jumping in and out of VNQ on triple digit moves up or down. So while the original intent was to get reit exposure and the dividend, I always will sell something if I have a short term gain which I was hoping to achieve in the long term.
I will be quarded more closely and buy less shares next time based on your concerns though. Thanks
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The Almighty
No problem... if you are trading, then you definitely do not want to be in the non-traded.
Buffalo Soldier
Dreadlock Rasta
Freak, I'm thinking about doing about 10 percent in Corp bonds. What do you think of LQD?
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The Almighty
I am of the mindset that we are going to see a double dip recession. I also believe that bonds in general (but treasuries more so than corporates) are over valued.
Some of the downsides to bonds...
1) Yields are low on the higher quality bonds (typically you are going to see 4-6% depending on maturity)
2) Interest rates are more likely to rise than fall (kind of obvious I know). As rates rise, bond prices tend to fall.
3) Inflation will eventually come into play. More than likely not in the next year, but eventually this fiat money being pumped into the system has to be accounted for. Loss of purchasing power of money tied up in bonds is a major reason I am not buying them right now.
Keep in mind... the above is IF you are planning to buy and hold. If you are using it as a trading vehicle, then the overall trend has been up (though relative strength to most sectors of the market is still weak).
As for LQD specifically, the chart remains on an uptrend, but is very close to a technical sell signal. If it closes at or below 105.75, it will initiate a sell signal. Closing at/below 105 would be a triple bottom breakdown... which is a stronger sell signal. A close at 102.75 or below breaks the long term trend line. That would be a 'get the hell out' signal
If you buy it here... watch it closely or put tight stops on it. The 102.75 is the major one. You do not want to hold this if it breaks that level (on the close). The other breakpoints are sell signals, but given how tight they are to the current price, you really wouldn't be giving up much (percentage wise) to simply put the stop at 102.74.