REITs have been on a tear the past couple years. Holy cow! With the recovering housing market coupled with investors' unquenchable thirst for yield, these types of companies have reached astronomical heights. REITs are income machines and income machines are exactly what many investors want right now.
Enter LTC Properties.
My original thesis for selecting LTC as a holding in my portfolio was simple: baby boomers are aging. An aging population should translate into higher demand for nursing homes and assisted living accommodations. I was specifically looking to add a health care REIT. LTC Properties (I believe it stands for Long Term Care Properties) does exactly that.
This is a picture of one of the properties LTC owns in Fort Collins, CO. Before I joined the US Army, I lived in Fort Collins and used to work out at the gym behind this facility. Seeing properties in real life helped me understand that this isn't just a ticker symbol, this is a company with real assets! And I have seen some of them! I drove past this one more times than I can count.
There are a number of choices in the health care REIT industry, I choose LTC for reasons stated above plus I liked their conservative debt load and monthly dividend. I regularly listen to the conference calls and can appreciate the conservative yet focused management. It probably wouldn't have mattered which REIT I picked in the health care space, they've all done well.
OK I admit I don't look at my portfolio positions very often and didn't even realize this thing had doubled until today. I purchased 109 shares 05AUG2011 which is sitting on a 97% unrealized cap gain + another 13% from dividends.
Not trying to brag here, but this is the first time one of my purchases doubled. This will be the last pat-me-on-the-back post for a while...
CI - a double - well done! Hey, don't worry about patting yourself on the back. After all, if you don't, who will!! :)
ReplyDeleteHehe this is my blog I guess. I cannot talk stocks and investing with my peers at work, they don't understand.
DeleteCI, nice. I have a few stocks which are near 50%, not yet doubled, but heading towards that goal. Are you using gain or position trimming method or do you hold forever? By that I mean, if your stock reaches let's say 50%, you sell 10% of your holdings to release some cash and buy back on a dip, or another stock etc. This is a strategy called Reverse Scale strategy where you are scaling in and out of the stock to keep your portfolio balanced and release some cash for more purchases.
ReplyDeleteI am thinking about using such strategy, but I am undecided yet.
I trimmed LTC July 2012 (you can read about on this blog) and used the proceeds to buy SNH. That was move was a wash. SNH outperformed LTC during that time until recently.
DeleteHowever if I didn't do that LTC would be way overweight. Sorry, I like LTC and all, but I don't want to rely that heavily on it. Plus the move increased my income and diversified my holdings. I do not regret it.
It's time to look at trimming again. LTC is once again my largest position even after the pruning last year.
ABBV is up over 80%, ABT 60%, ITW 50%. I have no plans to sell those stocks, they are not large positions.
Real estate stocks are a good way to go. I like the idea of having some kind of protection against inflation. Real estate gives you that inflation protection advanatge.
ReplyDelete