Friday, February 4, 2011

how many eggs in how many baskets? What's next?

I'm sure you have already heard the old adage, "Don't keep all your eggs in one basket!"  And I know you said to yourself, "WTF!  I don't even like eggs!  What am I?  I substance farmer?  Dammit, where are my eggs Benedict?!?!"

If this is indeed the case, I shall attempt to share some wisdom with you since you're still an investing noob and don't know your posterior from a hill of beans when it comes to investing.  You perhaps even at this point are still leery of me, my ideas, and this whole "investing" thing since with financial meltdown in the past few years and the media choosing only to broadcast doom and gloom, plus with your substance income up to this point, you're saying I want my money NOW!

Well my friend, you're a douche.

Get your damn head out of your arse and start investing in your future...  And not just in "get rich quick scheme 2011 Inc."  Because they aren't in it for you, nor will you ever get rich from them.  (Protip: You can make money if you bet against them since they clearly aren't in it for the long haul.  How?  SHORT sell it and enter a "zero-bid" to close out your position after they go down the tubes.)

But since I haven't explained how short sells work yet, let's rewind (yes, that's becoming a very dated term now) and get some diversity in your portfolio.

If you started with my advice, you're now the proud owner of some shares of one of the Canadian big banks.  Since I told you to buy them (last week) they have gone up in value around 2-4% depending on which big bank you bought.  (minus your commission of course)

So what now?  I wouldn't sell it just yet.  Your position just closed a few days ago!  Big Canadian banks will thrive now, next week, next month and for as long as Canada exists.  Canada still has some draconian leftovers from eras gone by when large scale protectionism was the norm.  We're only recently challenging some of this old stuff thanks to the folks at Wind Mobile.  Canadians don't want real choice!  We want to be robbed!  (Well... at least the ones who own the stocks do!  And now you own a little slice of that so take yer profit and shaddup!)

So lets say your slow and steady savings of $25 a week has now hit $500.  You do have enough money to start buying other interesting things.  (And things that I like)  You could add to your position with your bank and that wouldn't be stupid, but it wouldn't be terribly advantageous.  $500 will only get you 6-9 shares of any of the big banks.   It's time to buy something smaller.

How much smaller?  How about something in the $4 per share range?  That will let you buy 100 of something.

I like AAR.un.  Its called Pure Industrial Real Estate Trust.  And if you haven't yet gleaned from the name, it's a real estate trust and they only manage/own industrial properties.

Why do I like it?  It pays over a 7% yield and Canada is a big industrial player.  Market forces since the crash back in 2008 have kept the price down, yet they continue to pay consistent monthly yields.

The industrial sector in Canada should be making some decent recovery/improvements/gains/increases in the next few years provided the global recovery keeps soldiering along.  (Slow and steady is far far better than an instant return to previous levels.  I'm happy it's taking so long.  It means things are realistic and sustainable!)

If you buy 100 units, you get a whopping $2.50 per month for distributions.  But put $425 in your savings account and see how much you get after a month.  ($0.75 if you're lucky)

I bought some, I've been holding it for quite some time now.  I've continued to add to it, little by little.  It's gone up nicely in value all the while paying me 7%+ yield. 
It has gone up and down a bit but hold your horses and hold on to it.  They pay you to wait.

Full disclosure:  I currently have a LONG Position in AAR.un. 

Next time: will I ever stop digressing and missing the point of my posts?  Hopefully yes and I'll explain why it's good to diversify for real!

Disclaimer: My recommendations are for me and me alone.  If you follow them and lose everything, you need to look no further that the nearest mirror to establish the guilty party.  I can not and will not accept any liability for MY decisions, since they are based on my efforts and my research.  It's my money to win or lose. 

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