Question: I often hear you and others on the business programs talk about REITS (Real Estate Investment Trusts). Is this a good time to consider investing in a REIT , and if so, which one? I enjoy your show very much. Regards — Tom (Gulfport, MS)
Gary B: Tom, unlike many critics, I think there is still money to be made in real estate. However, timing is everything and most REITS are in no-man's land, ready to go up...or down! One that shows promise, though, is the Vanguard REIT, symbol VNQ. However, per my philosophy, I'd wait for it to tip its hand, buying only if it shows renewed signs of strength. The chart below explains what I mean.
|Gary B Smith|
But at this point, you might as well wait for it to take out the old high. Given that, I’d look to buy if it closed above $63.50
Question: I just want to know if this is the right time to buy a house, or is it better to wait because of the real estate market "bubble?" — A FOX Fan
Gary B: Boy, that's a big "depends" and revolves around a few things. One, is the house an investment, or a home? If the latter, then I'd advocate not timing your purchase and instead just figure out the nicest place you can afford. Personally, my wife and I have bought 6 houses in the past, through all types of markets, never thinking if the "timing" was right. We've never been disappointed because whatever house we're in quickly becomes a "home." And trite, but true, a real home is priceless. Of course, if the house is an investment, then it depends on where you're buying. There are still some areas of the country — southern Florida for example — that many think are overpriced. Other areas, and I'm thinking about my area of D.C. and suburban MD, have cooled considerably. That said, median prices have come well off their '05 highs, so it's probably time to at least start looking.
Question: I'm an avid watcher of the "Bulls & Bears" show. My question is: What is your 6 - 12 month opinion of Baldor Electric (BEZ)? Thanks — Russell
Gary B: Russell, the stock is in super position. I’d look for it to break into the $30s soon, and reach the mid-30s sometime in '06.
Question: What do you think of Cameco (CCJ)? It's the largest uranium producer in the world, and nuclear power seems to be becoming a more viable energy source around the world. — Greg
Gary B: Greg, the good news is that CCJ has a splendid, upsloping chart and if you're a long-term holder, I'd continue to stay in the game. However, if you're more of a trader, CCJ is at the top of that upsloping trend channel, and probably due to back off a bit. If so, I'd start looking to buy in the low $50s.
Question: I am retired. I have $20,000 sitting in a money market account which has disappointing returns. Where can I invest this small sum of money to supplement my other income in retirement? — H.C. (Bella Vista, AR)
Gary B: H.C., that's a tricky answer, because I don't know how much risk you're willing to take. In addition, I don't know if you want to get capital gains out of the $20K or are just looking for it to spin off dividend or interest returns. Those caveats in mind, one new offering I do like is an ETF called PIV. It's a closed end fund which tracks the Value Line timeliness holdings and according to their literature, has more than doubled the return of the S&P over the past 10 years. I like it so much, in fact, that I own some shares myself.