Investment Ideas for my portfolio for 2008-8K

[acesfull]

Hi All

 

Its that time of year again. I will be receiving my year end bonus and have some accounts being PIF from some customers.

In all I will have about 8k to play/invest with.

 

Here are some of my ideas.

 

Start funding a REIT trust -- 3k- anyone have a favorite??

 

Precious metals fund--- 3k-- anyone have a good one< I can research???

 

Food Fund--- 2k-- even in tough times people still need to eat.. Any Idea's for a good MF/Food sector??

 

Normally I fund my retirement accounts and pay down the principle on my mortgage and add to the emergency fund.

 

But this year I just want to expand a little and invest in some Mutual Funds from my gut, gamble a little

Hopefull If I am still around next year, my 8k investment will have grown a little

Thanks for your ideas and your opions.

 

acesfull

[goldtrad]

I am a bit concerned about the risk of the commercial paper these mutual funds are holding so you might want to consider a fund that has a US Treasury money market fund. Not Ginnie Mae but short term T-Bills. That said if you only have a small amount under 15K to open I would go with United Global. That's Frank Holmes. The gold fund is USERX. If you can scrape up 15K go with PMPIX. That's Profund's 150% Gold Fund. It tracks the Dow Jones Precious Metals Index which is fairly close to the XAU. All exchanges are free and unlimited. No t-bill money fund though. If you want a conservative way to play the metals just buy CEF. Half gold and half silver bullion. Metals look dicey here.

[acesfull]

goldtrad,

 

I only have 3k maybe 4k to invest in the gold.

 

I want to put at least 3k into a REITS fund.

 

Thanks for your post.

 

acesfull

[54regcab]

Do you have any debt that is over 8% or at "introductory rates"? If so, I'd pay those off before investing ANY or that $8K.

 

If you are out of debt except the mortgage I'd max out all tax advantaged accounts (401k, Roth IRA, etc) before investing any money in a taxable account. Taxes tend to decrease your returns substantially

Edited December 15, 2007 by 54regcab

[tman]

As so far as REIT exposure I reccomend Trowe Price real estate fund.

 

http://quicktake.morningstar.com/fundnet/M...mp;Symbol=TRREX

 

 

T. Rowe Price Real Estate TRREX

 

 

Morningstar's Take | 12-10-2007

by Andrew Gogerty

 

We're sticking with T. Rowe Price Real Estate.

 

Manager David Lee uses a diverse, yet opportunistic, approach at this fund in an attempt to outpace his real estate peers. He's not beholden to just one type of analysis, but rather will use either net asset value or funds from operations (operating cash flows) to value a company's properties. At the same time, he looks to keep volatility in check by making sure the fund's holdings are well diversified by sector and region.

 

To be sure, Lee holds many of the same mainstream REITs as his peers, but a close look at the portfolio shows his nose for value. He scooped up shares in Macerich MAC, a small mall operator overshadowed by Simon Property Group SPG, in 2007 because he thinks the firm's property portfolio continues to improve, yet its stock valuation shows little optimism. Lee also purchased Highwoods Properties HIW and Brandywine Realty Trust BDN earlier this year. Both firms operate outside the soaring Denver, New York, and Washington D.C. markets and have begun revamping their property portfolios.

 

True, the fund has struggled this year, but we're impressed that Lee hasn't chased returns. In mid-2007 the fund's benchmark, the Dow Jones Wilshire REIT Index, added health-care REITs such as Ventas VTR and HCP HCP, yet Lee didn't bite. He doesn't like the bondlike nature of many businesses in the sector because he sees many of those firms as finance-management plays rather than a collection of unique properties and locations. We like that type of conviction, especially in a category where many funds focus on their industry weightings relative to their benchmark. That stance and no exposure to surging foreign markets such as China and Hong Kong have left this fund behind its peers on a relative basis this year. But Lee's tenure and long-term success, combined with the fund's low costs, give this fund a strong resume for investors looking for a steady, domestic-focused offering.

 

Year Total Return (%) +/- Category

YTD -13.80 -3.93

2007 --- ---

2006 36.75 3.17

2005 14.54 3.03

2004 36.82 4.80

Data through 11-30-2007

Edited December 15, 2007 by tman

[54regcab]

As so far as REIT exposure I reccomend Trowe Price real estate fund.

 

I own TRREX, it has underperformed it's peers lately. Do you see it making a comeback?

TRREX Performance

[tman]

As so far as REIT exposure I reccomend Trowe Price real estate fund.

 

I own TRREX, it has underperformed it's peers lately. Do you see it making a comeback?

TRREX Performance

As long as David Lee runs the fund It will make a comeback. Pretty much all of the real estate funds are underperforming, but this is only short term.

[Circus]

acesfull, I'd like to ask you a question. Do you normally invest in gold, or are you wanting to be more conservative due to recent market volatility?

[acesfull]

Do you have any debt that is over 8% or at "introductory rates"? If so, I'd pay those off before investing ANY or that $8K.

 

If you are out of debt except the mortgage I'd max out all tax advantaged accounts (401k, Roth IRA, etc) before investing any money in a taxable account. Taxes tend to decrease your returns substantially

Hi 54

Only debt is mortgage @ 8%. I pay down the principle each month with any money that is left over after my emergency fund and my IRA's are funded. Maybe I will just play it safe with the 8k and put 4k into EF. put 2k into SEP/IRA and paydown mortgage principle with 2k.

What do you think?? Thanks

acesfull

[acesfull]

acesfull, I'd like to ask you a question. Do you normally invest in gold, or are you wanting to be more conservative due to recent market volatility?

Hi Circus

No, I do not have any gold investments. I am a conservative investor. Most if not all of my money is in my emergency fund and in my retirement accounts. I also like to pay down my 8% mortgage.

I was just kicking around my idea with my fellow cbers. After more thought, I will probably just take the 8k and fund my EF and IRA's

and pay down my mortgage. It's boring but it's probably the correct move.

Thanks

 

acesfull

[54regcab]

Do you have any debt that is over 8% or at "introductory rates"? If so, I'd pay those off before investing ANY or that $8K.

 

If you are out of debt except the mortgage I'd max out all tax advantaged accounts (401k, Roth IRA, etc) before investing any money in a taxable account. Taxes tend to decrease your returns substantially

Hi 54

Only debt is mortgage @ 8%. I pay down the principle each month with any money that is left over after my emergency fund and my IRA's are funded. Maybe I will just play it safe with the 8k and put 4k into EF. put 2k into SEP/IRA and paydown mortgage principle with 2k.

What do you think?? Thanks

acesfull

 

8% is pretty stiff on the mortgage, can you refi to a better rate? What is you LTV and do you pay PMI/have a 2nd? If you are over 80% LTV paying it down enough to get rid of PMI in order to get a better rate may be the wisest use of the $8K.

 

On another note I wouldn't invest in ANY "fixed" instruments until you get that mortgage rate lowered/paid off, there is no sense in investing in bonds @ 5% while paying 8% on a mortgage...

[Circus]

I'm in agreement with 54 about the refi. Why pay 8% when you can possibly get a much lower rate. Also, if paying down the LTV will get rid of the PMI then I'd go that route as well.

 

You might wind up not investing much (or any) of your $8K in the traditional sense, but if the end result is savings a few hundred dollars a month then that's a type of investment as well.

[acesfull]

Hi All

 

I am concerned about my 8% mort. However I started my own business and on paper I am not making any money.

 

I don't think I will qualify for a better rate? This is a subject I will start kicking around on the mortgage page for the pro's there.

 

I don't pay PMI. As for equity in my home, not much. I owe about 350k, the property is worth maybe 410-415k in a better market.

 

So my plan is keep attacking the principle each month and hope for a big realestate turnaround.

 

Thanks,

 

acesfull

[54regcab]

8% isn't a bad zero risk return, paying down the mortgage looks pretty good. I don't see the overinflated prices of real estate returning, IMHO sub-prime loans drove the prices WAY higher than they should have ever been.

Keep an eye out for the IRS auditor, they are going to wonder how you are paying more in mortgage interest than you made in income. Your mortgage company will send a 1098 to the IRS even if you don't claim it on your tax return.

Edited December 17, 2007 by 54regcab

[MrGrinch]

Stay out of Reits and Gold for a while. Commodities will be hot in 2008 until the powers that be figure out that corn ethanol causes inflation!

[timhibb]

Stay out of Reits and Gold for a while. Commodities will be hot in 2008 until the powers that be figure out that corn ethanol causes inflation!

 

causes inflation why? artificially low price because of govt subsidation?

[MrGrinch]

It's simply. Diverting corn to ethanol instead of feeding cows, pigs, and people has driven the price up( corn ) over 100% in the last 18 months or so. Have you not noticed the increased price in bread, milk, meat and other ag products lately. This economy has had significant inflation for several months regardless of whether wall steet or the Fed admits it. Ethanol is ruining, not saving the economy!

 

P.S. Consumer note: ethanol causes your vehicle to be less fuel efficent...yet the gasoline wholesalers charge you the same amount as non blended gas! You are being ripped off again.

[Annuit CÅ“ptis]

It's simply. Diverting corn to ethanol instead of feeding cows, pigs, and people has driven the price up( corn ) over 100% in the last 18 months or so. Have you not noticed the increased price in bread, milk, meat and other ag products lately. This economy has had significant inflation for several months regardless of whether wall steet or the Fed admits it. Ethanol is ruining, not saving the economy!

 

P.S. Consumer note: ethanol causes your vehicle to be less fuel efficent...yet the gasoline wholesalers charge you the same amount as non blended gas! You are being ripped off again.

Won't more people start growing corn, driving the price back down?

[MrGrinch]

The farmers probably will...but many farmers got out of the business. New farmers are rare because of the high starting costs and work ethic. So if they all start growing corn what happens to the price of peanuts, potatoes, cotton, rye, wheat et al. ADM looks like a good investment for 2008 to me.

 

I noticed that Gold got a good pop today. During high inflation Gold and precious metals do well as a hedge. Beware if the fed starts to RAISE rates in an attempt to control inflation. Right now, the fed is still in denial.

[54regcab]

I've never met a farmer that didn't inherit the family business. With land @ $2,000/acre 1,000 acres is $2M. How many people want to tie up $2M to work 12hrs a day and make $40K/yr?

[Annuit CÅ“ptis]

I've never met a farmer that didn't inherit the family business. With land @ $2,000/acre 1,000 acres is $2M. How many people want to tie up $2M to work 12hrs a day and make $40K/yr?

I thought the agriculture was big business these days, less and less being run by families... Guess that shows what us city-slickers know!