Monday, September 28, 2015

Recent Buy

     The REITs have been beaten down over the past several months. The price of a barrel of crude oil these days reeks havoc on economies that depend on oil.  In western Canada, oil plays a major role in the economies of Alberta, Saskatchewan and north eastern British Columbia. Some major oil players have there headquarters in Calgary. Some oil companies has been acquired or completely shut down as it is difficult for small companies to survive.
      Interest rates are really low right now. As it is cheaper to borrow money, REITs have been borrowing money to increase the size of their portfolios. I own units in 2 REITs (Dream Office REIT and Cominar REIT) and own shares in a real estate corporation Killam Properties. The low interest rates cause people to fear these REITs as interest rates will eventually rise. When mortgages come up for renewal, their interest rates will be higher for the mortgages that currently have low rates due to the present day rates.     
     On September 24, I purchased 47 units of Dream Office REIT (D.UN.TO) at $20.60 inside my TFSA. The total cost of the purchase is $973.31 including commissions. I averaged down on this position. The average cost basis of this new purchase is $20.71 per unit.  I turned the DRIP on for this position inside my TFSA as I can still lower my cost basis with each additional unit purchased.

Click to Enlarge

     The chart immediately above shows the share price has fallen 24.10% over the last year. As an investor, I try to be greedy when others are fearful. This chart also says Dundee REIT instead of Dream Office REIT. Dundee REIT is the old name of the REIT that was changed to Dream Office REIT during the last year. 

      Currently, Dream Office REIT is paying a  $2.24004 per unit annual distribution.  The yield on this new purchase is 10.82%.  This purchase adds $105.28 to my annual dividend income.  

     I will update my investment tab spreadsheet in early October to reflect this new purchase.

Disclosure: Long D-UN

I am not a financial planner, financial advisor, accountant or tax attorney. The information on this blog represents my own thoughts and opinions and should NOT be taken as investment or business advice.

Every individual should do their due diligence to make their own financial decisions based on their financial situation and tolerance for risk.

No comments:

Post a Comment