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An Income Investing Article Anthology

Posted by sanserve on December 17th, 2010

After forty years of investing, a few things become clear: you need to focus on quality securities, diversify properly, and develop a lifetime supply of income. Income portfolio management is a puzzle in its own right, and the major problem is focus --- income is king. Losing market value and losing money are two totally different things.

A colleague of mine recently brought an interesting phenomenon to my attention. REITs and one particular REIT – Simon Property Group (SPG) – have had quite the run in the last few months. The above chart runs from March until today – June 22, 2009. It’s clear to see that REITs as an asset class (using VNQ as a proxy) have rallied in excess of the broad market.

How can I get you to stop fixating on monthly market values and to focus on the purpose of the securities within the portfolio?

All investors need to become intimate with both the content of their portfolios and the workings of the various cycles that impact on security market values. They need to expect, even anticipate cyclical changes in the market values of their securities by taking reasonable profits in either classification willingly, gleefully, and without hindsight.

New home sales rose by 2.7% in September, according to the Commerce Department. Andrew Snyder says this is an important sign of a rebound in the property market. And that means adjusting your portfolio to include real estate investment trusts (REITs) like Post Properties (NYSE:PPS) and American Campus Associates (NYSE:ACC).

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