December 1, 2008

Current UpDown performance down 30%

Practice invest

My Updown account performance has been pretty poor lately. I'm now down 30% since the start. Ouch! I'm glad its not real money. I'm barely beating the S&P 500 at this point. In the month of November the S&P 500 beat me by a full 10%. I was down over 17% and the S&P lost 7%.

Out of 14 stocks in my portfolio there are 6 of them that have lost over 50% since I bought them. Only 2 stocks are trading for more than what I bought them at and those two are barely positive at this point.

I bought several REITs in October and those have lost a lot. Between them my investment has lost over $125,000 of the original roughly $300,000 that I paid. Thats about a 42% loss! I think that long term most of the REITs are a decent investment for a couple reasons. Most of the REITs are still financially sound and their very low market value is due to market panic more than anything. They also are paying very high yields and as long as income stays up the yields will continue. So I'll recoup some of the losses via dividend payments. But I'm learning a few things about REITs by doing this. For example I've seen that one REIT that invests in hotel properties has lost a lot due to the economy hurting vacation travel. Whereas a REIT that is mostly invested in commercial property rented by government agencies has not lost much at all. So one thing to look at closely for a REIT is what kind of property are they invested in.

My Updown account is doing poorly but it is still a fun and useful learning tool.

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