I am travelling to New Zealand Australia to meet with Monday Morning Millionaire Program members. Between hotels and airports, internet connectivity is spotty and my usual Monday Morning blog did not go out.
I am sending it now together with a report on my personal portfolio. Please forgive typos and other mistakes. The writing conditions are less than ideal.
The many people who have made a lot of money investing in real estate by being in the right place at the right time would agree with Will Rogers to whom the expression “Buy land. They ain’t making any more.” is attributed. Nevertheless, in August 2018, the Federal Reserve Bank of San Francisco stated: “The housing crash and the ensuing recession of 2009, has cost every man, woman and child in the US $70,000 each in lost income”. The housing crash did not affect Canadians and for all Monday Morning Millionaire Program members, the ensuing recession was a rare bargain buying opportunity.
The advantages of investing in equities are: 1. good returns, 2. constantly quoted prices, 3. absolute liquidity, 4. transaction costs so low that investors can ignore them and 5. good records. Those five points are why the Monday Morning Millionaire Program recommends investing in the stock market. Real estate doesn’t come close to matching equities when it comes to constantly quoted prices, absolute liquidity and low transaction costs.
To quote Will Rogers about making money in the stock market, he said that it is easy to do. “You buy a stock and when it goes up you sell it. If it don’t go up, don’t buy it.”
For investors who feel that they should own some real estate in order to diversify, a real estate investment trust (REIT) is an ideal vehicle. REITs are companies which own and in many cases operate income-generating real estate. They have all the advantages of investing in equities described above. Research REITs thoroughly if you want to invest in them. There are many. Many have a good track record combining the best of investing in the stock market with the best of investing in real estate.
Now, here is report my personal portfolio.
Once again, my shares of ABBV were not called away at the end of last Friday’s trading, I was able to write (sell) covered calls on these once more. I wrote a strike price of $US80.00, expiry date this coming Friday, March 29 and received US1,540.00 per contract— the most in a long time. Nevertheless, this portfolio is down significantly because ABBV itself (the underlying) took a real beating since I bought it.
My “fun” portfolio represents only 5% of my invested money. It will have a small overall effect regardless of what it does. This might be the exceptional opportunity which I could then apply to my core portfolios but I am too nervous to buy ABBV.
Rosi has her fun skiing, making muffins, walking our dog, spending time with our grandchildren.
Core portfolios (all are tax-advantaged)
On Monday March 11, 2019, Rosi and I made major changes to our core portfolios.