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Tuesday, September 11, 2018

Has it really been 10 years since the Global Financial Crisis?

Time really flies.

What triggered this blog post?

Messages from two readers.

Reader #1 says...
First Reit dropped quite a bit recently.

Not sure if it is due to rising interest rates.

Am thinking of buying more for retirement income.

What is your view? Thanks.

AK says...
I have not been paying attention but it is probably because I am not thinking of adding.






Reader #2 says...
BTW i was looking to increase my shares in first Reit but Cloudy Outlook On Sponsor Ownership for them made me feel wary.

not sure will it be market noisy or a good opportunity.

current price was my entry price years ago.

AK says...
I haven't been paying attention to First REIT much because my entry prices were so low. 😛






Of course, regular readers know that no matter how sneaky they are, they cannot out sneak AK.

Trying to get me to tell you to buy or to sell?

Sneaky!

OK, I know.

Bad AK! Bad AK!

Anyway, sneaky AK has a few things to say in this blog.






1. Ignore the noise.

When I bought First REIT in a big way and blogged about it, I received messages from people telling me not to.

I ignored them.

It wasn't the first time and it wasn't the last time.

As long as we feel that we have our facts and reasons right, ignore the noise.





The fact that many people disagree with us does not mean that we are wrong.

Of course, we might not always be right but if we spend our time listening to the noise, it messes up our minds.

We might not always make the best decisions but if we are approximately right more often than we are wrong, it is good enough.






2. Time matters.

I have been invested in First REIT for many years and it is probably as old an investment as AIMS AMP Capital Industrial REIT in my portfolio.

It is an investment that generates income for me year after year.

The longer I stay invested in First REIT, the safer the investment becomes.

In a blog published in 2010, I said that my investment in First REIT made during the Global Financial Crisis would be free of cost in five and a half years.





In fact, I have recovered all of my capital and more by now.

This is including investments made in First REIT before the Global Financial Crisis.


Want an absolutely free of cost investment that generates a regular income?

Unless we are lucky enough to inherit income producing assets, with some work and a healthy dose of luck, dreams do come true.


I haven't been paying attention to the share price for a long time.

Why?








When we buy an asset, thinking about its income generating ability, we are investors.

We should be able to value the asset and decide on how much is worth paying for it.

When we buy an asset simply because people who bought such an asset made money in the past or because everyone else is buying it now, we are speculators and more concerned with prices.






Of course, both investors and speculators, if they know what they are doing, can make money.

I am both investor and speculator although I invest more than I speculate these days.


So, to buy more First REIT (or any other asset) or not to buy?

First ask if you are an investor or speculator?







Related posts:
1. First REIT is for keeps.
2. Investing or speculating?

2 comments:

CL said...

AK said:
"When we buy an asset simply because people who bought such an asset made money in the past or because everyone else is buying it now, we are speculators and more concerned with prices"

Thank you for the reminder again.

"be free of cost in five and a half years....This is including investments made in First REIT before the Global Financial Crisis...In fact, I have recovered all of my capital and more by now."

Thank you for informing that you bought it before the crash as I always got the impression you only buy it during a big or a small crash. This information is important to remind me that one shouldn't compare the recent price with GFC price thus refraining from taking action.

AK71 said...

Hi Chris,

You might be interested in this:
A simple way to a double digit yield.

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