The Weekly Lineup: What about REITs and Resources?

RSS NinjaIt seems wherever I look on the investing scene, bloggers and investors are viewing stocks as being overpriced. They seem to be having a hard time finding value in the current market. Certainly the big blue-chip dividend payers such as P&G, Coca-Cola, and Wal-Mart are expensive. That’s not a surprise when you consider the DOW and S&P 500 are hitting all-time highs. Scary!

REITs and Resources

I think most dividend investors are looking in the wrong spot for value, and not considering other opportunities. REITs (Real Estate Investment Trusts) and resource stocks are on sale right now. These asset classes are cheap, they’ve suffered significant declines, and nobody wants to touch them with a ten-foot pole. Obviously they are cheap for a reason, and there may indeed be future declines. But I think there is opportunity here, and I have some posts planned for the future to take a deeper look. The rebound in these two sectors may have already started.

Ben Carlson’s post Are REITs a Buy did very well last week, with not one but two Globe & Mail mentions. So a big thanks to Rob Carrick!

Globe and Mail reporter John Heinzl also thinks REITs are a bargain right now, and he wrote about that in The Right Time to Buy REITs?

The Weekly Lineup

Here are some other great reads from around the web:

First off The Dividend Guy (aka Mike) is launching a big dividend project for DIY (do it yourself) investors this fall. He wants to make investing in dividend stocks easy for people to understand! You can get on his mailing list to keep current on the launch of his new project.

Dividend Mantra discussed in-depth his recent sale of Intel Corp., a company he was bullish on just last year. I’ve always felt Intel is a problematic investment, and that the yield is likely too high for the company to sustain. In light of current technology trends, and Intel’s position in the market, I think Mantra made a wise decision to sell. (I’ll also have a post on Intel soon).

GoBankingRates had a fun post with Billionaire Budget, a look at Warren Buffett’s frugal life-style and the importance of simplicity and frugality.

I like pretty well anything that Dividend Growth Investor writes. In this post DGI reflects on the strategy of long-term dividend growth investing.

When it comes to bonds you are either for or against them. Read Mark’s post on why he’s moved from holding a portion of bonds in his portfolio to a 100% dividend stock and equity ETF portfolio. One point Mark brings up of course, is that he has a defined benefit pension plan from work. In part many experts view this as having a “big-bond”, hence why he is comfortable taking on more equities.

While some investors could handle a 40% or 50% drop in their portfolio, I doubt most investors could. Read the Canadian Couch Potato post on why now is exactly the wrong time to sell your bonds. This is even more prudent advice considering the dizzying heights of global stock markets. Anyone remember 2006 to 2008 when equities were soaring, and investors were dumping their bonds?

If you live in Victoria, Nanaimo or Vancouver you’ll want to take advantage of this opportunity! Canadian Money Saver contributor Donald Dony is offering a series of investing courses for beginners. You can get more info from his Calendar of Events page. Donald has decades of experience with technical analysis and understanding markets. So you’ll gain a lot of good info by attending.

Have a nice weekend everyone! ;)

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8 Responses to “The Weekly Lineup: What about REITs and Resources?”

  1. My Own Advisor

    Sep 28. 2013

    Thanks for the mention. Ben’s article on REITs was great.

    Mark

    Reply to this comment
  2. NoWayMe

    Sep 28. 2013

    Long time lurker here, first time poster. I agree with your view (and others) on REITS right now. Took a small position of 200 shares HR.UN last week. Might add to it soon and plotting my position on a few of the other majors.

    Also agree the resource sector has taken a huge hit. Recently took another small 200 share position in ENF (Enbridge income trust) and 150 shares of COS (Canadian oil sands). After seeing SU increase significantly to the upside with Buffett’s position announcement, I see COS as undervalued in comparison ( … then again what does a small fish like me know?!)

    Anyways I hope to be a regular poster here sharing my ideas and discussing with you guys. I’m relatively new to the “long term” view of dividend investing. Wasted my first 2 years of investing on volatile mining stocks (though I still hold a few: SLW and SSL *cringe*) that didn’t get me anywhere.

    Thanks Dividend Ninja for all the great articles and links to other bloggers!

    Reply to this comment
    • Dividend Ninja

      Sep 28. 2013

      Hey NoWayMe,

      Always glad to have lurkers become invovled readers! Welcome. :) I think virutally everyone here has made mistakes along the way…

      Make sure to keep to your allocation, whether that is bonds and stocks or by sector. You don’t want to become over-weighted in any one area – right?

      One way to play things is to use ETFs rather than buying individual companies. Another way is to put equal positions into each holding so you don’t become over-weighted in any one holding.

      I think you could probably hang onto Silver Wheaton as a long-term hold. Lots of volatility in the short term though.

      Cheers

      Reply to this comment
  3. Dividend Mantra

    Sep 28. 2013

    Ninja,

    Thanks for the mention! I’m looking forward to your article on INTC. :)

    While I think the dividend is sustainable from here, the growth of it is in question if they can’t get some traction in mobile soon. If Bay Trail isn’t a hit I think INTC has problems going forward.

    Hope you’re having a great weekend!

    Best regards.

    Reply to this comment
    • My Own Advisor

      Sep 29. 2013

      Good decision to sell INTC Mantra.

      I agree with Ninja and you, and besides, tech is so fickle. Invest in companies that have a wide(r) moat and index everything else. Then investing becomes rather simplified.

      Thoughts?

      Mark

      Reply to this comment
  4. Dividend Gamer

    Oct 02. 2013

    I really like REITs and BDCs, they comprise my highest current holdings.

    MLPs like VGR, are a fantastic value to shareholders.

    I will also be diversifying into banks,insurance,asset management and other financials as well as some manufacturing and other companies.

    Reply to this comment
  5. NoWayMe

    Oct 17. 2013

    Well ended up buying a few more REITs recently to bring the weighting around 6%, so now as the REIT aspect of the portfolio sits:

    200 share HR.UN @ 21.10
    200 shares REI.UN @ 25.14
    150 shares D.UN @ 28.62

    That is 73.99 in monthly distributions.

    Reply to this comment

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