A. Here are my top 3 reasons to invest in REITs.
Reason 1: Own property and earn returns by doing nothing
First, when you own a REIT stock, that's all the action you need to take in order to earn returns on capital gains as well as getting paid dividends on the REIT property stock.
Reason 2: Forget about landlord duties
Another big plus when you invest in REITs, is that you won't have to worry about collecting rent, paying levies, dealing with tenants, fixtures and carrying out other repairs.
You'll let the property company deal with all those menial tasks while you just own and earn on property itself.
Reason 3: Buy the property you want in an instant
When you look to invest in property, it can take months or even years to close a deal to either buy or sell the property. With REITs, as there is a much higher number of buyers and sellers, it's as easy as buying a stock on your platform or making one phone call to your broker.
And you won't have to worry about any of the extra taxes and legalities that you would when buying or selling a normal property.
You’re about to learn how to supercharge your returns… without boosting your risk!
But before I begin, I want to make a few things very clear.
To participate in this strategy...
• You do NOT have to be a financial wizard.
• You do NOT have to have a large amount of money, and
• You do NOT have to have any trading experience.
You should also know that this won’t require much of your time either… About 20 minutes a week is all you need.
In this letter
, you will learn how to use what we call pick pocket trading a simple technique to turn your portfolio into a world-class custom hedge fund.
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Q. "Last week you mentioned the process of scaling into a trade where you buy more of the stock when the market moves in your favour in order to raise your entry level. Can you explain what scaling out then means with an example?"
A. To scale out is simply the opposite of 'scaling in'. This is the process where you would sell off or get out of a position in increments while the share price rises.
Traders do this to lock in profits, while the share price is climbing before it even hits the take profit level.
Let's say you hold 50 shares of a company at R30 and you placed your take profit price at R60. Due to unforeseen circumstances, your charts now tell you that the trend has changed and you now believe the share price will start to fall from the current price at R50.
You might decide to save your trade from turning a profit into a loss. And so you may decide to sell 25 shares at R45 and sell the remaining shares at R48.
This would now bring your average selling price down.
In fact, the average selling price would be
= (Selling price 1 + Selling price 2) ÷2
= (R45 + R48) ÷ 2.
= (93 ÷2)
This means, instead of closing your position at the initial R60 take profit price, you would have closed your position at a scaled out average price of R46.50.
“Wisdom yields Wealth”
Analyst, Red Hot Storm Trader