Real Estate Investment Trusts—A Long-Term Investment Strategy

Real Estate Investment Trusts—A Long-Term Investment Strategy
Real estate investment trusts (REITs) are for-profit trusts
established by Congress in 1960. Their purpose is to give
small investors an opportunity to invest in large,
income-producing properties.

Stocks of many public REITs are available on major stock
exchanges and offer investors an efficient way of investing
in real estate. Each shareholder earns a pro-rata share of
the REIT profits. There are also private-owned REITs which
operate in much the same manner.

Overall, these trusts are definitely a long-term investment
strategy, but a good one for people who don't have the time
or inclination to be full-time investors. Within the public
and private REIT categories there are several types of
trusts:

Equity REITs. These trusts own and operate income-producing
properties (e.g. shopping centers, apartments, office
buildings, warehouses, hotels, etc.). They may specialize
in a certain market sector and in a certain geographic
location, or they may invest nationally.

Mortgage REITs. These trusts concentrate on the financing
end of the business. They tend to be real estate property
owners and operators or, they provide indirect credit
through buying loans (e.g. Ginnie Mae mortgage-backed
securities, etc.). The revenue from these latter trusts
comes mainly from interest earned on their mortgage loans.

Hybrid REITs. These trusts combine the investment
strategies of both equity REITs and mortgage REITs.
Qualifications for Public REITs To qualify as a public
REIT, a company must, in general: Pay at least 90% of its
taxable income to its shareholders every year. Have at
least 100 shareholders. Invest at last 75 percent of its
total assets in real estate. Derive at least 75% of its
income from rent or mortgage interest from properties in
its portfolio.

Advantages of Public REITS.These trusts have several
advantages: There is no required minimum. They have a lower
risk compared to stocks. They are a good income source and
provide a consistent stream of income. No public market
fluctuations As of 2005, all REITs had produced a 10.68%
return over a 20-year period. (Source: National Association
of Real Estate Trusts) REITs provide good dividends, but
they are taxable) They offer diversification and, thus,
more safety. They offer high liquidity; it's easy to enter
and exit a REIT.

A REIT corporation or trust generally doesn't pay corporate
income tax to the IRS or to the state.

Disadvantages of Public REITs. A downturn in a specific
investment area can seriously damage a REIT investment.
However, this possibility can be reduced by investing in
REITs that own diversified companies within a variety of
industry sectors.

Another disadvantage of public REITs is that they generally
don't perform as well as the stock market on a long-term
historical basis. Privately-Owned REITs These trusts
possess all of the advantages of public REITs. However,
they tend to generate higher income and pay out higher
dividends (6-7% compared to a pubic REITs' 5-6%.

In terms of disadvantages, the upfront fees can be higher
than with public REITS and such trusts are also not as
liquid. In other words, it can be tougher to cash out than
with public REITs.

A third potential disadvantage is limited transparency;
that is, investors may not know exactly what the trustees
are doing on a day-to-day basis. Methods of Investing in
REITs You can buy shares of individual companies, or you
can invest in diversified REIT mutual funds. It's very easy
to invest through such vehicles as an IRA, Keogh, etc. You
can also invest through borrowed money to buy REIT shares
on margin.

Key Point: Use REITs for long-term investing strategy.

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Jack Sternberg is a nationally recognized expert on real
estate investment who's been in the business for more than
30 years. Sternberg is the creator of the renowned "Buyers
First" Program. His deals have totaled over $750 million
and he's been to the closing table more than 1,500 times.
For more, visit http://www.askjacksternberg.com

Covered Calls: Maverick Investor Goes Head-to-Head With Motley Fool

Covered Calls: Maverick Investor Goes Head-to-Head With Motley Fool
A covered call strategy is a way of effectively 'renting
out' your shares for a steady income of around 5% per
month, in a similar way to renting out your investment
property.

Warren Buffet does it, as do a lot of the large
buy-and-hold investors, because it makes sense to generate
income on stock holdings while you wait for them to rise in
value, or to produce dividends.

It may not be right for everyone, of course, but if you're
interested in generating 3% - 5% every month from covered
calls, then you owe it to yourself to get as well informed
about the strategies as you can.

Now, in searching the web for more information on covered
calls, you may well stumble across an article on Motley
Fool called "Stay Away From Covered Calls".

The author, Dan Caplinger, makes the fundamental error of
seeing covered calls as a 'gimmick' that doesn't really
make much sense. His case is built on sand, and there are a
few large holes in his arguments.

This Motley Fool article has been brought to our attention
on a number of occasions now, and it's time to correct the
errors Mr Caplinger has made.

1. In his RS example, Caplinger says that the stock was
stuck around $20 for most of 2004 and 2005 (there's a link
to the 5-year chart below).

Assume the stock was 'stuck' for 20 months, and assume 5% a
month in premium income for selling the covered calls. That
means you'd be making $100 a month per option sold for
twenty months, for a stock holding of $2,000 per option.
So, after 20 months, your stock is effectively free,
because you've got back 20 x $100 in premium income.

2. All the time you're generating that income, you know the
stock is going to break out of the range at some point -
but up or down, and when, no one knows! It's fine now
saying it broke up, but it could have gone the other way
or, indeed, done nothing at all.

3. Once it does break up, and you get your stock called
away at a profit, there's nothing at all to stop you
getting right back in again! In the same hour! Assuming the
premium still looks good, and the charts look OK, this is
what a lot of covered call traders do.

You'll also notice from the chart that it wasn't quite the
smooth run from $25 to $60 that Caplinger implies. The
first break went to around $50, but then fell back to $30
before climbing again. There's plenty of opportunity in
there to make significant sums from covered calls in this
period, too!

Caplinger is basically arguing for a buy-and-hold strategy,
or what is sometimes called a buy-and-pray strategy, which
means you can only make money when the stock goes up. (With
dividends, maybe you make a bit if it holds steady, too).

With covered calls, you profit when the stock goes up, down
or sideways! You have far more bases covered. Sure, you
might miss a big move occasionally, but so what? As an
investor, you are never wrong to take a profit, no matter
what happens subsequently.

At Maverick Investor, we believe that...

(steady monthly income) + (no losing trades)

beats

(occasional big upward moves) - (money tied up in stocks
going nowhere) - (some losing trades)

Every Time!

I can't comment on the tax, but there are entirely legal
and above board techniques to trade covered calls without
paying any tax at all.

As for commissions, I'm amazed he even mentioned them!
They're so small now with online trading that that is
almost irrelevant. OptionsXpress, as an example, quote a
minimum of $29.90 for covered calls. Think or Swim are even
lower, starting at $2.95 per option contract, and a $9.95
flat fee for stock trades up to 5,000 shares.

All in all, this is not the most impressively
thought-through article I've ever read, and quite a
disappointing drop in the usually high standards at Motley
Fool.

----------------------------------------------------
You can find the Motley Fool article at
http://tinyurl.com/38hpoz
The 5-year RS chart is at http://tinyurl.com/34m44q
To find out more about making 5% a month from covered
calls, visit http://maverick-investor.com and click on the
Covered Calls section.

The Basics of Yahoo Finance

The Basics of Yahoo Finance
Investment for future is a wise thing to do for your
retirement. One form of such investment is purchasing
stocks, which represent a fraction of the company, so that
when you purchase stocks of that company, you are in a way
purchasing into that company. You can get profit if the
company gets profit, and lose money if the performance of
the company goes down. Success in purchasing stocks on the
net comes from the ability to see the bigger picture of the
market and from concentrating on even the smallest details.

Yahoo Finance is one of the services provided by Yahoo that
gives almost all kinds of financial information including
stock exchange rates, stock quotes, financial reports,
corporate press releases and famous message boards to
discuss the stock valuation and prospects of a company. In
addition to that, it also provides some host tools for the
management of personal finance.

At Yahoo Finance, you will have access to a huge range of
financial resources including
- Latest market information including delayed quotes,
historical price data, tracking of personal portfolio, SEC
filings, mutual funds and stocks charts, data of insider
trading, exchange rates of currencies, estimates of
earnings and research, recommendations of brokerage and
listings of industries and sectors.
- The service also includes display of financial news from
different news agencies world wide, editorial contents from
various experts and external links for news from other web
sites.
- Personal finance tools like calculators, rates and
glossary.
- Content on personal finance including how to guides,
comments from experts and latest finance news.
- Interactive features like stock chat rooms and financial
message boards.
- Quotes and information from European markets of UK,
France, Italy and Germany, Asian markets of South Korea and
Japan and markets of Australia and New Zealand.
- And an ample directory of other web sites.

If you want to start investing and want to learn the basics
about financial planning and stock market, the category of
Investment References and Guides on Yahoo Finance directory
can be a great help to you. In this, you will find numerous
resources which will assist you to get started with the
stocks, mutual funds, bonds and other vehicles of
investment. However, in regard to trading actually, Yahoo
Finance is not a provider of brokerage service, but you
will have to register with a stock brokerage firm for
selling and buying stocks. For that purpose, you will have
to go to brokerage listings present in the Yahoo Directory.

Yahoo Finance contains the most updated financial
information on the net. Prices, annual high & low, changes
in dividend rates and outstanding common shares are updated
daily; corporate action items like exchange changes and
stock splits, officer changes and flash earnings
announcements are updated as and when they are announced;
quarterly financial statements, company phone numbers and
addresses and shares that are held in public hands, the
float, are updated after every 3 months; officer names,
number of employees and annual financial statements are
updated every year; the mutual fund reports are updated
once a day at around 6 pm; 2-year, 5-year and max charts
are updated once a week on Friday, after the market gets
closed; Research reports are updated every day; Downgrades
and upgrades are updated 3 times a day; IPO news is
continuously updated during the whole day.

----------------------------------------------------
http://www.story-of-finance.com

Romanian Property is Hottest in Europe

Romanian Property is Hottest in Europe
Emerging property markets that bear all the hallmarks of
future success are really quite hard to find. That is until
I looked at the case for Romania. It offers property
investors all the future capital growth they would want
from an emerging real estate market. But don't take my word
for it try following the multi nationals, they have all the
resources possible to select the best markets in which to
invest.

The car manufacture Ford recently invested in Romania by
officially taking control of Romania Automobile Company
Craiova, the former Daewoo operation. Fords commitment
includes plans to boost the plant's annual production
capacity to 300,000 units and double employment to 7,000.
Ford executives said the factory will assemble the Transit
Connectin 2009 and a new small car in 2010. John Fleming,
president and CEO of Ford of Europe, said the Transit
Connect, a compact commercial delivery vehicle, will go
into production in Craiova in mid-2009. The vehicle
currently is built only in Turkey, but Ford's assembly
operation there is at full capacity. Earlier this year,
Ford announced plans to begin marketing the Transit Connect
in the U.S. in summer 2009.

Romania is proving to be a safe place to invest with high
capital appreciation especially in the Bucharest area. The
property market which offers homes at very low prices has
in some areas of Romania seen bullish growth rates of 25%
to 30% p.a. for the last 3 years. Romania is currently
undergoing major infrastructural developments which will
see further capital growth all over the country.

Real estate agents and many pundits say that the growth
trend is expected to carry on for the next 5 years. Romania
joining the EU January 1st 2007 along with the development
of tourism on the Black Sea coast and in Transylvania, has
secured the regions future in the years to come. It will
have one of the fastest growing economies in Europe

The Super Highway between Constanta and Budapest which will
go through Bucharest and Brasov will be a critical element
in securing Brasov's role in Eastern Europe on a long-term
basis. Not to mention that low cost airlines fly to several
cities in Romania lead by Wizz Air and Easyjet.

British citizens are increasingly purchasing properties in
Romania either as investments or holiday homes.

Romanian property prices are very cheap in rural areas but
you need to be prepared to spend some time and to have
renovation expenditures for your property to achieve
British standards.

Mortgages are now available for foreigners. Should you wish
to buy a villa or a plot of land, you will need to set up a
company which is a very simple process - your estate agent
should assist you with it. Purchasing a new or off-plan
apartment can be carried out in your name without
necessarily requiring a company formation.

What is for sure Romania offers investors a one off
opportunity to enter a market in its infancy. Readers of my
articles will know that my firm belief is that profits are
not just made on sale but on the purchase price. This is
why Romania has a compelling case for overseas property
investment but you will need to get your skates on.

----------------------------------------------------
Author Nicholas Marr has written numerous articles about
overseas property. His articles are based on his experience
of working with hundreds of international real estate
agents in his capacity as CEO of overseas property portal

http://romania.homesgofast.com/