Regional and Super-Regional Banks, Fear-Mongering, and Non-Traded REITs
The Money Wise guys are back to continue the conversation on many of last week’s topics, but they begin with last week’s numbers from Wall Street. The Dow was down slightly, the S&P 500 was up 1.4%, and the NASDAQ was up 4.4%. YTD the Dow is down 3.9%, the S&P 500 is up 2.0%, and the NASDAQ is up 11.1%. Regional and super-regional banks are once again the main topic of conversation, and the guys discuss how much of the conservative media is over-dramatizing the situation and causing unnecessary fear. They also dig into the element of marketing that exists within this conversation because many of the far-right-leaning programs are promoting gold and other types of investments. The Money Wise guys remind listeners to beware of “guarantee” – the g-word that should always cause skepticism. As an example, they discuss an ad for non-traded REITs with a “guaranteed” 10% return.
What are Non-Traded REITs?
Since the guys spend some time on this topic, let’s dig into what Non-Traded REITs are anyway. A REIT is a Real Estate Investment Trust, and so a Non-Traded REIT refers to one that is not listed and traded on a public exchange. According to the Corporate Finance Institute, Non-Traded REITs allow investors to access diversified real estate investments with little capital requirements and added taxation benefits. Though this might sound good on its face, the Money Wise guys share why Non-Traded REITs are the second-worst thing for your portfolio (after annuities). With a 40-60% occupancy for office space these days, they doubt any investors in these particular Non-traded REITs were getting a 10% “guaranteed” return.
In the second hour, the Money Wise guys give you a peek behind the curtain as they share What Wall Street Won’t Tell You. You don’t want to miss the details! Tune in for the full discussion on your favorite podcast provider or at davidsoncap.com, where you can also learn more about the Money Wise guys or take advantage of a portfolio review and analysis with Davidson Capital Management.