Friday, July 3, 2015

I added to my D.UN position

I have a rule: Don't put too much money into any one stock. Too much risk. I've watched too many supposedly good companies stumble and fade away.

That said, D.UN is a good company. It is not a great one, but it is a good one. It has suffered some downward pressures that are unique to it but I don't see them as insurmountable in the least. I own D.UN and I'm in it for the long haul. It is one of my core holdings, at this time.

As I said in an earlier post, REITs may not take the severe hit that many are expecting when interest rates begin climbing in earnest. And if they do, they should recover over time. I'm willing to make a small investment and take on the risk.

When I originally got into D.UN I could only buy 500 shares and remain below my investment cut-off point. Today D.UN dropped in value to a point that I could pick up another 100 shares and still remain below my total investment cut-off point. I will now make about $112 each month from my core D.UN holdings.

One REIT that I do worry about is REM. The American mortgage REIT from iShares is a dividend factory. It pumps out double digit yield annually. I love it but it worries me. If interest rates do start to climb, and they will, REM may take a big hit. On the bright side a small holding gives my income a very nice lift and has for a number of years now.

I'm up in the four digits region with REM. If it starts dropping, I'll drop it from my holdings. If the mortgage REIT ETFs drop low enough, I'm thinking of REM or MORL, I would consider getting back into the high-yield game.
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Since writing this, D.UN has continued to slide. With the price of oil at six year lows, leasing office space in Calgary is not the plus it was. D.UN has lots of office space in Canada's West and this has become quite the drag on the once buoyant REIT. Unexpected changes at the top have add to investor concerns.

D.UN is a hold today and no longer a buy. I'm holding and reinvesting my D.UN dividends in other areas to add diversity to my portfolio.

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