Where to find the biggest bang for your dollar in 2012

Time recently published a list of items expected to get cheaper and a list of those expected to shoot up in 2012:

The cheaper list:

·       Wine priced at $30 or more a bottle is collecting dust on store shelves. To move stock, retailers will offer discounts.

·       Car rentals agencies have a glut of vehicles sitting idle on the lot. They’ll offer discounts to get those cars on the road.

·       This year many computer-related items like eBook readers and tablets will come down in price ahead of the iPad 3 release.

·       3-D TV is a relatively new technology that will hit critical mass this year, and with many new designs and makers in the game, prices will fall to an irresistible level.

·       Home prices fell about 3% last year and should fall that much again this year.

And the list of items expected to go up:

·       Fewer flights will lead to higher ticket prices. American Express predicts prices in North America will rise 5% for economy seats and 7% for business class.

·       Wholesale food prices are rising, and the costs are being passed along to consumers. Food costs rose 6% last year and will rise again in 2012. These increases will be felt most at home, not in restaurants, where the costs are easier to absorb.

·       Fuel prices began inching up just before the holidays and are expected to again reach $4 a gallon at the pump.

·       The U.S. Postal Service will raise rates by 4.6% next year while both FedEx and UPS are hiking small-package rates by 4.9%. It may be the end of common free-shipping features for online shoppers.

·       To make up for budget shortfalls, local authorities will jack up the levy for everything from dog licenses to vehicle registration and parking. Look for local cops to write more tickets too.

You can find the complete article here.

Best wishes,

George

Adding a new REIT

My goal with the e-FinancialWriter REIT Index is to show how real estate can provide attractive returns in good times and bad. I plan to accomplish that with approximately 10 REIT stocks across several sectors of the economy. There are now eight in three sectors: Self-storage, health care, and Canada.

The strategy is working ...

The Index is up 25.44% since I introduced you to my first REIT, Public Storage (PSA), on 3/14/10.

And today, I’m adding a fourth sector, retail properties.

Here’s why:

• The Department of Commerce reported that December 2011 retail and food services sales were up 6.5% from one year ago.
  
  
• Total sales for the full year 2011 were up 7.7% from 2010.
  
  
• Total sales excluding autos for all of 2011 were up 7.3% from 2010.
  
  
• Personal savings rate went down in 2011, falling to 3.7% from 5%.

Americans buying more, saving less — I see a trend here!

Plus this is an election year. That means it’s a safe bet we won’t see any tax increases; and the administration will do everything possible to cut unemployment, pump up the economy, and keep consumers spending.  

With that backdrop, I like the single-tenant, free-standing retail sector.

These are the REITS that have tenants such as convenience stores, full-service restaurants, and automotive parts stores. They’re the kind of places you probably shop at several times a month … to fill up your car, have a moderately priced sit-down lunch, or buy some wiper blades for the car.

National Retail Properties (NNN) is my pick. It’s well-diversified, with 1,298 properties in 47 states. Almost half of the holdings are in the south and southeast U.S.

The stock has returned an average of 11.4% a year over the past 3 years, for the period ending 9/30/11, including dividends. The returns and dividends have been slightly above the sector’s average.

And speaking of dividends, NNN is one of only 105 out of the more than 10,000 publicly-traded companies to have increased dividends for 22 or more consecutive years.

So starting this week keep your eye on NNN and the other REITs in my Index.

Best wishes,

George

Week end REIT index

Here is the e-FinancialWriter REIT Index for the week ending January 27, 2012.  

REIT	Sector	Blog date	Price	Closing price 01/27/12	Return to date %	Dividend yield %
PSA	Self storage	3/14/2010	90.75	137.52	51.54	2.66
VTR	Health care	12/30/2010	52.87	58.82	11.25	3.91
HCP	Health care		36.81	41.92	13.88	4.58
HCN	Health care		47.53	57.25	20.25	4.95
SNH	Health care		22.00	22.36	0	6.71
IAECREIN:CN	Canada	9/27/2011	19.45cn	22.89cn	17.71	0
ZRE:CN	Canada		16.29cn	18.99cn	16.57	5.31
INVRLPRA:CN	Canada		5.45cn	5.46 cn	0	1.97
Index return					25.44

Source: Bloomberg

Some insider buying is going on with one of the Index’s REITs. Richard Gilchrist, a director at Ventas (VTR), indicated that he purchased 2,500 shares for $140,000, increasing his holdings to 10,987 shares (and options to purchase 7,520 shares).

When insiders buy, it often means they see something good going on that the rest of us don’t.

To read the posting where I introduced a specific REIT, click the “Blog date” link. And if you’d like to see past week’s reports, just type “reit index” in the search box.

Have a good weekend!  

George

Need a break from all the campaign mumbo-jumbo?

It’s primary time. Here in Florida ours is less than a week away. And the pressure is on.

Two flyers were in my mailbox today … both saying that Newt spells trouble.

No sooner had I trashed those, and the phone rang. “Don’t believe that Romney is a moderate Republican,” the recorded message began.

Then I was searching for something online, and what flashed before my eyes: Think You Know Mitt? Think Again.

And of course there was Obama’s State of the Union/political/finger-pointing speech Tuesday night.

I can only imagine what the rest of the year holds.

So in the midst of all the barking from both sides, it was refreshing to have someone send me this news clip. It’s short. And you’ll come away knowing that America is in good hands.

Best wishes,

George

Week end REIT index

Here is the e-FinancialWriter REIT Index for the week ending January 20, 2012.  

REIT	Sector	Blog date	Price	Closing price 01/20/12	Return to date %	Dividend yield %
PSA	Self storage	3/14/2010	90.75	135.83	49.67	2.69
VTR	Health care	12/30/2010	52.87	56.42	6.71	4.08
HCP	Health care		36.81	40.85	10.98	4.70
HCN	Health care		47.53	55.10	15.93	5.15
SNH	Health care		22.00	21.95	0	6.83
IAECREIN:CN	Canada	9/27/2011	19.45cn	23.12cn	18.88	0
ZRE:CN	Canada		16.29cn	19.25cn	18.17	5.23
INVRLPRA:CN	Canada		5.45cn	5.46 cn	0	1.97
Index return					22.97

Source: Bloomberg

To read the posting where I introduced a specific REIT, click the “Blog date” link. And if you’d like to see past week’s reports, just type “reit index” in the search box.

Have a good weekend!  

George