A Guide to <b>Real Estate Investing</b> for Retirement | InvestorPlace | Real Estate Investing |
- A Guide to <b>Real Estate Investing</b> for Retirement | InvestorPlace
- <b>Real Estate Investing</b>: The Exit Strategy - FI Fighter
- What you can learn from my <b>real estate investments</b> - Fortune
- 4.Young Americans prefer cash savings to stocks, <b>real estate</b> when <b>...</b>
- No Correction In <b>Real Estate Investment</b> Trusts | From The Buzz <b>...</b>
| A Guide to <b>Real Estate Investing</b> for Retirement | InvestorPlace Posted: 22 Jul 2014 09:30 AM PDT Real estate used to be the holy grail of investing — you could do no wrong. For many years, you could buy good-quality property, as much as you could afford, and you were almost guaranteed to make money. That ended in 2008. Now folks are looking for bargains, hoping to profit from the crash. So what's changed? I don't have to tell you that the commercial and residential real-estate markets took a huge hit in 2008 and have yet to fully recover. Many folks saw the value of their homes drop by 40% or more, and their net worth drop right along with it. In the meantime, bank short sales skyrocketed. Opportunities to buy may be returning, but something else has also changed. Folks on either side of the retirement cusp are in a different place in life than when they bought their McMansions. Children have fled the coop, so their needs have changed. Also, retirees and folks approaching retirement cannot afford a do-over. We no longer have time to recover from investment losses … certainly not if we plan on staying retired. When we conducted a survey of readers last fall to see what was on their minds – investment wise I mean — real estate investing was in the top 3. The other two were annuities and income investing. We've covered both several times, most recently here and here. With real estate investing a hot topic, I'd like to review the Money Forever Five-Point Balancing Test and see how it applies to real estate. It's the test we apply to all of our investments, not just stocks.
Some real estate may indeed meet all five criteria, but folks of retirement age must be much more selective. My wife Jo and I moved to Fort Myers, Florida in 1985 – about the time that the new airport opened, which allowed bigger jets access to the southwest corridor of Florida. I-75 was also extended south from Sarasota down through Naples and over to Miami. Real estate in the southwest part of Florida exploded. I had a good friend who put together several partnerships to invest in property. Twenty of us would put up 5% each, buy land, get the necessary permits, and then sell the property to a developer. We did well on several parcels. One parcel we bought, which I thought would provide the greatest return of all, we still own over 20 years later. We're still paying property taxes and associated costs after all these years. The situation is almost funny. We have to pay a farmer to "rent" some cattle in order to maintain our agricultural exemption on the property. While it seemed like a good investment when I was 52, I would pass on it today at age 73. Why? Those types of partnerships do not provide income, nor are they liquid. That means they fail No. 2 and No. 5 on our Five-Point Balancing Test. We have friends who for years bought homes and apartments, fixed them up, and then rented them out. Some resold them and some converted apartments into condominiums, often doing very well for themselves. Today these same friends want passive investments. They are quick to remind me that being a landlord means running your own small business. Their investments demanded a big-time commitment; they were anything but passive. Ask any active landlord and he will tell you of the amazing time commitment required – of the 3 a.m. phone calls from the fire department, the plumbing leaks and electrical mishaps, and the renters who never seem to pay on time. Retirees want to make money with their capital. They are not looking for a full-time job. That's why most folks on either side of the cusp of retirement are likely better off with investments that meet our Five-Point Balancing Test. That does not mean that rental property or buying property for appreciation is out of the question. But we're looking for real-estate investments that are professionally managed and liquid. That's why many smart investors are turning to real estate investment trusts (REITs). They offer all the income you could ask for, and they're entirely passive — someone else does the work for you. You need to do your homeowrk, of course, but if you're looking for income, you could do a lot worse than REITs. We've recently added a real-estate investment in our portfolio that meets all five points in our balancing test. Use this link to start a 90-day risk-free trial to Money Forever and get the full report on our real-estate investment. Making money in real estate is no easier than it is in the stock market. It requires a lot of work, patience, and in some cases a lot of luck. Retirement is not the time for a "get rich quick" scheme.  |
| <b>Real Estate Investing</b>: The Exit Strategy - FI Fighter Posted: 24 Jul 2014 12:52 AM PDT There's an old saying — "A rising tide lifts all boats." In an upmarket (like the one we are currently experiencing right now), almost every single investor looks like a genius. You can literally put your money into any real estate purchase, and your investment will keep on going up! Who knew flipping could be so easy? Just buy, hold… don't fix a thing, and you can easily sell it back to the marketplace a few months later for huge gains! Genius! It's all fun and games, right? Well, yes, until the market inevitably decides to correct itself again (like always!), causing your investment to come crashing back down to earth (reality). Ouch! So, the time to worry isn't after the unavoidable market crash… it's while you're doing your analysis work, prior to purchasing. If you want to protect your downside, you must carefully consider your exit strategy. What will you do when the going gets tough? Will your investments be able to weather the storm? Can I Hold?When doing any analysis work for potential rental property prospects, I always assume the following doomsday scenario: "A market crash ensues! My rental property is now worth half of what I paid for. I am potentially underwater and may owe more in loans than the home is worth! Further, my employer is downsizing and has decided to let me go. I am now unemployed and out of a job… Can I still make ends meet with my rental property investment?" I realize that there are many investors out there who invest in real estate primarily for appreciation/flipping (a proven strategy that has made many people filthy rich!)… The trouble with investing for appreciation, however, is that most properties that have strong potential do not cash flow very well… That, and it's also extremely difficult (if not impossible) to accurately time the market, over and over again… This is an oversimplified statement, but in general, most homes that have potent appreciation potential are also located in the best neighborhoods (Class A and Class B), where the top-notch school districts are found. Unfortunately, rents don't scale with purchase prices, and those same desirable homes generate the least (or negative) cash flow for a typical downpayment of 20 to 30%. Quite simply, too many wealthy homeowners will want to live here and are more than willing to pay a premium to do so! For instance, if I was looking to purchase another rental in the Bay Area that had future appreciation potential, I might target the following townhouse deal today: With conventional financing, I would find myself cash flow negative, right off the bat. In an upmarket, this probably wouldn't be too bad because I would most likely have a day job to cover the spread, and the short-term appreciation would make me feel really, really smart! However, the only real exit strategy I would have with this type of rental would be to sell during that same upmarket. If the bull run were to suddenly halt, that same "instant equity" would vaporize in an instant. Without positive cash flow to tide me over, I could easily find myself in a most precarious situation! Quite frankly, because there is no margin of safety (positive cash flow) for this type of investment, this is the primary reason why I am no longer investing in the Bay Area today… sadly. *Of course, if you are paying all cash (or putting down a more sizable downpayment), then that's a whole different story! So, when in doubt, don't purchase any rental properties that do not cash flow from Day 1! I haven't purchased a rental property in a few months, but here is the cash flow analysis I used for Rental Property #5: As you can see, Rental Property #5 cash flows, even after setting aside 20% of the gross rents for reserves (vacancy and maintenance). There are no hard and fast rules, but when I am purchasing out-of-state rentals for cash flow, I typically look for over 10% Cash-On-Cash Return (this includes allocation of funds for reserves). Although owning rental properties will never be risk-free (especially when utilizing loans), if you buffer aside sufficient margin, you should be able to weather any economic storms that may arise during the life of the investment. With enough margin in place, not only will you be able to withstand a sharp decline in home equity, but you should also be able to lower rent by a few hundred dollars each month and still have the property produce positive cash flow… That way, even in the worst of times (say you have to advertise below market rent to find a qualified renter), you should still be able to locate a good, paying tenant. Can I Sell?What's the most desirable asset class when it comes to property? Single family homes (SFH). Most everyone wants to live in one, whether you're a renter or homeowner. Single family homes are usually located out in the quiet suburbs, away from all the noise and crowds of the inner city, and close by to the nice school districts. As such, single family homes will usually be priced at a premium (relative to other townhouses, condos, duplexes, etc.), and produce the least amount of cash flow. However, if you can locate a SFH that cash flows sufficiently, it may be worthwhile to accept a lower ROI… When it comes to exit strategy, SFHs will trump any other property type… They will always be the easiest to liquidate and sell! Here are the numbers for Rental Property #1, a SFH: The Cash-On-Cash Return of 6.82% is far from being high (no allocation for vacancy, maintenance, or PM either!), especially for a cash flow generating property. However, in this case, I was more than happy to sacrifice returns to get into a SFH in the Bay Area. With Rental Property #1, I do not worry much about my exit strategy. It is located in a great location, features a large backyard, and is the type of property emotional homebuyers will gladly overpay for during the peak summer months. In a downmarket, such a property should also retain its value (less volatile than the cheaper investor grade townhouses, condos, etc.) and experience less overall fluctuation. Although no property is fully immune to the whims of Mr. Market, highly coveted properties, such as this one, will always retain a higher value since prospective homebuyers will always be knocking on the door, rain or shine. So, although my properties in Chicago produce much higher Cash-On-Cash Returns, I would not be so quick to dismiss Rental Property #1 as being an inferior investment. Exit strategy is an extremely important component that must be factored in when doing any analysis work! After SFHs, we have townhouses and condos which can also be relatively easy to sell, provided they are located in good enough locations. Once you start getting into multi-family units and apartments, the investments naturally become more illiquid; only other investors operate in this space. For instance, Rental Property #3 and Rental Property #5 are 2-flats (duplexes) located in South Chicago. I invested in these properties primarily for cash flow. In this particular market in Chicago, most people rent, anyway, so the owners are pre-dominantly investors. Should I ever elect to sell either property in the future, most definitely, I would be selling back to another investor… More likely than not, any potential buyer would also be extremely savvy and know how to run proper cash flow numbers! My exit strategy in Chicago is more hazy, and less certain than with my SFH and townhouse in the Bay Area. And like most things in life, there are no free lunches! These are some of the risks you take when trying to balance out ROI and exit strategy. Realistically speaking, I would not anticipate being able to sell the 2-flats back to the market for a tidy profit. No, there would be no emotional homebuyers swooping in to overpay for these properties… Of course there's nothing that precludes you from crafting your own portfolio — a few SFHs here, some 2-flats there, an apartment complex sprinkled on top, etc. Just make sure you factor in the sellability of your investment before you jump in with both feet! Can I Deleverage?Leverage is a double-edged sword that cuts sharply in either direction. When times are good, leverage can be your best friend and help catapult you to newfound riches. However, when times get rough, leverage acts more like a poison pill that slowly erodes away your wealth. Always be careful when using leverage!!! Yes, I owe close to $800,000 in loans, but each one I took out was thought out beforehand. When factoring in for exit strategy, I consider many things, and an important one is the size of the loan. Going back to my Bay Area property, Rental Property #1 produces the lowest Cash-On-Cash Return, and also carries the largest loan amount ($236,250) of all my properties. As mentioned previously, though, it's also a SFH that's located in a very desirable location. As such, I am more than comfortable taking on this sizable loan because I trust my exit strategy. Ditto for Rental Property #2, which is a townhouse located in a Class A neighborhood. The loan was initially $232,000, but the unit cash flows decently, and should be easy to sell, if necessary. With out-of-state investing, I also happen to own a SFH in Indianapolis, IN. The loan on Rental Property #4 started out at $64,500. In comparison to my Bay Area rentals, this loan is minuscule! And that was precisely intended… At the time of purchase, I had no previous experience with owning rental properties in Indianapolis, and didn't want to take on too much risk… So, I found a property that cash flowed over 10%, was a SFH located in a good neighborhood (easier to sell), and lastly, I took on a tiny loan. The size of a loan is relative, of course, but I reasoned in my mind that this Indianapolis loan was nowhere near daunting, and one that I should be able to pay off in one fell swoop, should the need to do so ever arise. Just my own strategy, but I elected to take on the largest loans in the market I trust the most (Bay Area)… I own more properties out-of-state, but the combined loans of all those properties equates to less than what I owe in the Bay Area. SummaryWhen looking for potential rental property investments, many investors will fixate on ROI alone. Unfortunately, ROI does not tell the entire story, and it is also extremely important to consider your exit strategy when planning. We all want to hit a home run on every single one of our deals, but that isn't always possible, so it's prudent to also work out a gameplan to handle the downside of things. Further, any bear markets or corrections that occur in the future will always be beyond our control! So, we must plan carefully, and know in advance the course of action we will take… Will we continue to hold? Sell? Will it be possible for us to deleverage? When times are good, an exit strategy might be the farthest thing on the mind of a prospective investor… However, careful planning of an exit strategy may one day prove to be the most important homework assignment we could have done during our analysis. Happy investing! |
| What you can learn from my <b>real estate investments</b> - Fortune Posted: 24 Feb 2014 02:00 AM PST  The author visiting (for just the second time) the 400-acre farm near Tekamah, Neb., that he bought in 1986 for $280,000 FORTUNE — "Investment is most intelligent when it is most businesslike." –Benjamin Graham, The Intelligent Investor It is fitting to have a Ben Graham quote open this essay because I owe so much of what I know about investing to him. I will talk more about Ben a bit later, and I will even sooner talk about common stocks. But let me first tell you about two small nonstock investments that I made long ago. Though neither changed my net worth by much, they are instructive. This tale begins in Nebraska. From 1973 to 1981, the Midwest experienced an explosion in farm prices, caused by a widespread belief that runaway inflation was coming and fueled by the lending policies of small rural banks. Then the bubble burst, bringing price declines of 50% or more that devastated both leveraged farmers and their lenders. Five times as many Iowa and Nebraska banks failed in that bubble's aftermath as in our recent Great Recession. In 1986, I purchased a 400-acre farm, located 50 miles north of Omaha, from the FDIC. It cost me $280,000, considerably less than what a failed bank had lent against the farm a few years earlier. I knew nothing about operating a farm. But I have a son who loves farming, and I learned from him both how many bushels of corn and soybeans the farm would produce and what the operating expenses would be. From these estimates, I calculated the normalized return from the farm to then be about 10%. I also thought it was likely that productivity would improve over time and that crop prices would move higher as well. Both expectations proved out. MORE: Buffett widens lead in $1 million hedge fund bet I needed no unusual knowledge or intelligence to conclude that the investment had no downside and potentially had substantial upside. There would, of course, be the occasional bad crop, and prices would sometimes disappoint. But so what? There would be some unusually good years as well, and I would never be under any pressure to sell the property. Now, 28 years later, the farm has tripled its earnings and is worth five times or more what I paid. I still know nothing about farming and recently made just my second visit to the farm. In 1993, I made another small investment. Larry Silverstein, Salomon's landlord when I was the company's CEO, told me about a New York retail property adjacent to New York University that the Resolution Trust Corp. was selling. Again, a bubble had popped — this one involving commercial real estate — and the RTC had been created to dispose of the assets of failed savings institutions whose optimistic lending practices had fueled the folly. Here, too, the analysis was simple. As had been the case with the farm, the unleveraged current yield from the property was about 10%. But the property had been undermanaged by the RTC, and its income would increase when several vacant stores were leased. Even more important, the largest tenant — who occupied around 20% of the project's space — was paying rent of about $5 per foot, whereas other tenants averaged $70. The expiration of this bargain lease in nine years was certain to provide a major boost to earnings. The property's location was also superb: NYU wasn't going anywhere. I joined a small group — including Larry and my friend Fred Rose — in purchasing the building. Fred was an experienced, high-grade real estate investor who, with his family, would manage the property. And manage it they did. As old leases expired, earnings tripled. Annual distributions now exceed 35% of our initial equity investment. Moreover, our original mortgage was refinanced in 1996 and again in 1999, moves that allowed several special distributions totaling more than 150% of what we had invested. I've yet to view the property. Income from both the farm and the NYU real estate will probably increase in decades to come. Though the gains won't be dramatic, the two investments will be solid and satisfactory holdings for my lifetime and, subsequently, for my children and grandchildren. I tell these tales to illustrate certain fundamentals of investing:
My two purchases were made in 1986 and 1993. What the economy, interest rates, or the stock market might do in the years immediately following — 1987 and 1994 — was of no importance to me in determining the success of those investments. I can't remember what the headlines or pundits were saying at the time. Whatever the chatter, corn would keep growing in Nebraska and students would flock to NYU. There is one major difference between my two small investments and an investment in stocks. Stocks provide you minute-to-minute valuations for your holdings, whereas I have yet to see a quotation for either my farm or the New York real estate. MORE: Buffett looking to exit Washington Post's former owner It should be an enormous advantage for investors in stocks to have those wildly fluctuating valuations placed on their holdings — and for some investors, it is. After all, if a moody fellow with a farm bordering my property yelled out a price every day to me at which he would either buy my farm or sell me his — and those prices varied widely over short periods of time depending on his mental state — how in the world could I be other than benefited by his erratic behavior? If his daily shout-out was ridiculously low, and I had some spare cash, I would buy his farm. If the number he yelled was absurdly high, I could either sell to him or just go on farming. Owners of stocks, however, too often let the capricious and irrational behavior of their fellow owners cause them to behave irrationally as well. Because there is so much chatter about markets, the economy, interest rates, price behavior of stocks, etc., some investors believe it is important to listen to pundits — and, worse yet, important to consider acting upon their comments. Those people who can sit quietly for decades when they own a farm or apartment house too often become frenetic when they are exposed to a stream of stock quotations and accompanying commentators delivering an implied message of "Don't just sit there — do something." For these investors, liquidity is transformed from the unqualified benefit it should be to a curse. MORE: Yahoo sued over Buffett's billion-dollar basketball bet A "flash crash" or some other extreme market fluctuation can't hurt an investor any more than an erratic and mouthy neighbor can hurt my farm investment. Indeed, tumbling markets can be helpful to the true investor if he has cash available when prices get far out of line with values. A climate of fear is your friend when investing; a euphoric world is your enemy. During the extraordinary financial panic that occurred late in 2008, I never gave a thought to selling my farm or New York real estate, even though a severe recession was clearly brewing. And if I had owned 100% of a solid business with good long-term prospects, it would have been foolish for me to even consider dumping it. So why would I have sold my stocks that were small participations in wonderful businesses? True, any one of them might eventually disappoint, but as a group they were certain to do well. Could anyone really believe the earth was going to swallow up the incredible productive assets and unlimited human ingenuity existing in America? When Charlie Munger and I buy stocks — which we think of as small portions of businesses — our analysis is very similar to that which we use in buying entire businesses. We first have to decide whether we can sensibly estimate an earnings range for five years out or more. If the answer is yes, we will buy the stock (or business) if it sells at a reasonable price in relation to the bottom boundary of our estimate. If, however, we lack the ability to estimate future earnings — which is usually the case — we simply move on to other prospects. In the 54 years we have worked together, we have never forgone an attractive purchase because of the macro or political environment, or the views of other people. In fact, these subjects never come up when we make decisions. MORE: Buffett does Detroit It's vital, however, that we recognize the perimeter of our "circle of competence" and stay well inside of it. Even then, we will make some mistakes, both with stocks and businesses. But they will not be the disasters that occur, for example, when a long-rising market induces purchases that are based on anticipated price behavior and a desire to be where the action is. Most investors, of course, have not made the study of business prospects a priority in their lives. If wise, they will conclude that they do not know enough about specific businesses to predict their future earning power. I have good news for these nonprofessionals: The typical investor doesn't need this skill. In aggregate, American business has done wonderfully over time and will continue to do so (though, most assuredly, in unpredictable fits and starts). In the 20th century, the Dow Jones industrial index advanced from 66 to 11,497, paying a rising stream of dividends to boot. The 21st century will witness further gains, almost certain to be substantial. The goal of the nonprofessional should not be to pick winners — neither he nor his "helpers" can do that — but should rather be to own a cross section of businesses that in aggregate are bound to do well. A low-cost S&P 500 index fund will achieve this goal. MORE: Buffett 'major mistake' leads to Berkshire acquisition That's the "what" of investing for the nonprofessional. The "when" is also important. The main danger is that the timid or beginning investor will enter the market at a time of extreme exuberance and then become disillusioned when paper losses occur. (Remember the late Barton Biggs's observation: "A bull market is like sex. It feels best just before it ends.") The antidote to that kind of mistiming is for an investor to accumulate shares over a long period and never sell when the news is bad and stocks are well off their highs. Following those rules, the "know-nothing" investor who both diversifies and keeps his costs minimal is virtually certain to get satisfactory results. Indeed, the unsophisticated investor who is realistic about his shortcomings is likely to obtain better long-term results than the knowledgeable professional who is blind to even a single weakness. If "investors" frenetically bought and sold farmland to one another, neither the yields nor the prices of their crops would be increased. The only consequence of such behavior would be decreases in the overall earnings realized by the farm-owning population because of the substantial costs it would incur as it sought advice and switched properties. Nevertheless, both individuals and institutions will constantly be urged to be active by those who profit from giving advice or effecting transactions. The resulting frictional costs can be huge and, for investors in aggregate, devoid of benefit. So ignore the chatter, keep your costs minimal, and invest in stocks as you would in a farm. MORE: For investors, diamonds might be the new gold My money, I should add, is where my mouth is: What I advise here is essentially identical to certain instructions I've laid out in my will. One bequest provides that cash will be delivered to a trustee for my wife's benefit. (I have to use cash for individual bequests, because all of my Berkshire Hathaway (BRKA) shares will be fully distributed to certain philanthropic organizations over the 10 years following the closing of my estate.) My advice to the trustee could not be more simple: Put 10% of the cash in short-term government bonds and 90% in a very low-cost S&P 500 index fund. (I suggest Vanguard's. (VFINX)) I believe the trust's long-term results from this policy will be superior to those attained by most investors — whether pension funds, institutions, or individuals — who employ high-fee managers. And now back to Ben Graham. I learned most of the thoughts in this investment discussion from Ben's book The Intelligent Investor, which I bought in 1949. My financial life changed with that purchase. Before reading Ben's book, I had wandered around the investing landscape, devouring everything written on the subject. Much of what I read fascinated me: I tried my hand at charting and at using market indicia to predict stock movements. I sat in brokerage offices watching the tape roll by, and I listened to commentators. All of this was fun, but I couldn't shake the feeling that I wasn't getting anywhere. MORE: A popular 401(k) choice is still badly broken In contrast, Ben's ideas were explained logically in elegant, easy-to-understand prose (without Greek letters or complicated formulas). For me, the key points were laid out in what later editions labeled Chapters 8 and 20. These points guide my investing decisions today. A couple of interesting sidelights about the book: Later editions included a postscript describing an unnamed investment that was a bonanza for Ben. Ben made the purchase in 1948 when he was writing the first edition and — brace yourself — the mystery company was Geico. If Ben had not recognized the special qualities of Geico when it was still in its infancy, my future and Berkshire's would have been far different. The 1949 edition of the book also recommended a railroad stock that was then selling for $17 and earning about $10 per share. (One of the reasons I admired Ben was that he had the guts to use current examples, leaving himself open to sneers if he stumbled.) In part, that low valuation resulted from an accounting rule of the time that required the railroad to exclude from its reported earnings the substantial retained earnings of affiliates. MORE: myRA is not the way to save for retirement The recommended stock was Northern Pacific, and its most important affiliate was Chicago, Burlington & Quincy. These railroads are now important parts of BNSF (Burlington Northern Santa Fe), which is today fully owned by Berkshire. When I read the book, Northern Pacific had a market value of about $40 million. Now its successor (having added a great many properties, to be sure) earns that amount every four days. I can't remember what I paid for that first copy of The Intelligent Investor. Whatever the cost, it would underscore the truth of Ben's adage: Price is what you pay; value is what you get. Of all the investments I ever made, buying Ben's book was the best (except for my purchase of two marriage licenses). Warren Buffett is the CEO of Berkshire Hathaway. This essay is an edited excerpt from his annual letter to shareholders. This story is from the March 17, 2014 issue of Fortune. |
| 4.Young Americans prefer cash savings to stocks, <b>real estate</b> when <b>...</b> Posted: 21 Jul 2014 09:26 AM PDT The youngest American generation prefers to stow away cash in savings accounts rather than invest it in the stock market or real estate, a factor that could hurt their chances for a comfortable retirement, according to a Bankrate.com survey released on Monday (July 21). According to the survey, nearly 40 percent of American adults ages 18 to 29 favored cash investments, such as savings accounts and certificates of deposits, as their preferred way to invest money they don't need for at least another 10 years. Other options included real estate, bonds, stocks and gold. By comparison, about a quarter of all adults surveyed said cash was their preferred investment option. About 23 percent chose real estate as their top investment, while 19 percent chose stock investments. In a release, Greg McBride, chief financial analyst with Bankrate.com, said young people's hesitancy to look at other investment options could hurt their long-term savings. "The preference for cash and aversion to the stock market among young adults is very troubling considering this age group has the biggest retirement savings burden," McBride said. "They won't get there without being willing to assume a little short-term price risk in their long-term money." The survey, conducted by Princeton Survey Research Associates International, interviewed 1,000 adults living in the U.S. about how secure they feel about their personal finances. About half of all those surveyed said they feel much the same about the amount of money they have in savings compared to a year ago. Only 17 percent of respondents said they feel more comfortable with the amount of money they have saved. The youngest American's are also more likely to feel less comfortable with the amount of debt they're taking on than older adults. About 27 percent of respondents between ages 18 and 29 felt less comfortable with their debt than they did a year ago. That compares with 16 percent of those 65 and older. Read the full Bankrate report. Do you prefer to cash savings to other investment vehicles? Why? Do you think young Americans' savings habits are hurting their chances for a happy retirement? Share your views in the comment section below. |
| No Correction In <b>Real Estate Investment</b> Trusts | From The Buzz <b>...</b> Posted: 18 Jul 2014 10:37 AM PDT This article was originally posted on the Buzz & Banter where subscribers can follow over 30 professional traders as they share their ideas in real time. Want access to the Buzz plus unlimited market commentary? Click here to learn more about MVPRO+. Shares of Real Estate Investment Trusts (REITs) remain oblivious to the mess in the Middle East and Ukraine, and all the other anxieties surrounding equities. The iShares US Real Estate ETF (NYSEARCA:IYR) is regularly pushed around by the yield on the 10-year Treasury, so with rates heading lower, it is enjoying another push toward post-crisis highs around $76.50. The correlation between interest rates and the IYR will no doubt continue, but the real driver behind the REITs is, and will continue to be, the behavior of CMBS spreads. The latter have been tightening relentlessly notwithstanding rising or falling Treasury rates. In turn, tight CMBS are driving an avalanche of money into physical commercial real estate with the main problem being a scarcity of quality supply, particularly in prime markets. With the obligatory ups and downs, the dynamic described above will continue to support this group. Twitter: @FZucchi Position in IYR. The information on this website solely reflects the analysis of or opinion about the performance of securities and financial markets by the writers whose articles appear on the site. The views expressed by the writers are not necessarily the views of Minyanville Media, Inc. or members of its management. Nothing contained on the website is intended to constitute a recommendation or advice addressed to an individual investor or category of investors to purchase, sell or hold any security, or to take any action with respect to the prospective movement of the securities markets or to solicit the purchase or sale of any security. Any investment decisions must be made by the reader either individually or in consultation with his or her investment professional. Minyanville writers and staff may trade or hold positions in securities that are discussed in articles appearing on the website. Writers of articles are required to disclose whether they have a position in any stock or fund discussed in an article, but are not permitted to disclose the size or direction of the position. Nothing on this website is intended to solicit business of any kind for a writer's business or fund. Minyanville management and staff as well as contributing writers will not respond to emails or other communications requesting investment advice. Copyright 2011 Minyanville Media, Inc. All Rights Reserved. |
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