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Email this2:20 am
August 9, 2014
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I am trying to see which of these tools are better for someone looking for yield.
I know Pref have favourable tax treatment, while tax treatment for REIT depends on its sources of income.
I also know that Pref tends to be very volatile during a bear market (probably because most companies that issue them in the US are banks, and they are hit hard in 2008), and (slightly) less so for REIT.
What are other things that I need to be aware of, and which tool is more suitable for an environment with rising interest rate (especially during stagflation)? Additionally, are there histories of companies not paying dividend for Pref for a prolonged period of time due to restructuring, and what is the end result for the owner of said Pref? Furthermore, what happen to Pref when the issuer of Pref are merged with or buy-out by another company ?
I personally like REITs a bit more as I can calculate NAV base on average rent (or market price of properties, if available) of an REIT, so it makes it easier to judge my investment.
5:14 am
October 21, 2018
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For what it's worth: I've been retired 15 years and I like the regular income from REITs and Perpetual Prefs. I hold a large block of both categories. I like the diversification of XRE over individual REITs, and I'm OK with the MER I pay for that. I buy more Prefs when they are on sale like in March when I bought more POW.PR.D for $19.50. I'm looking to increase my XRE holding when the price is right.
I would recommend both REITs and Perpetual Prefs for retirement income.
4:21 pm
September 7, 2018
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pwm said
For what it's worth: I've been retired 15 years and I like the regular income from REITs and Perpetual Prefs. I hold a large block of both categories. I like the diversification of XRE over individual REITs, and I'm OK with the MER I pay for that. I buy more Prefs when they are on sale like in March when I bought more POW.PR.D for $19.50. I'm looking to increase my XRE holding when the price is right.I would recommend both REITs and Perpetual Prefs for retirement income.
I also own shares of that issue - POW.PR.D - which I bought as a new issue (no commission) in 2005 - paid $25 per share at that time and have collected a (5%) dividend of $1.25 per share annually for 15 years - I see the present market value is approx. $24.90 per share. I am surprised that POW has not redeemed these shares - but since the redemption price is $25, that would be a fair outlay. You made a smart buy @ 19.50 in March when the market took an exaggerated hit due to Covid situation. You already have a nice capital gain while you collect the 5% dividend.
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