good morning Internet! thank you so much
for joining me I know it takes time out
of your day to be here in this video I
want to talk with you guys about what
might happen to our REITs or real estate
investment trusts if the market crashes
in our face as you guys know I've made a
few videos on wreaths now on the channel
and I've been getting a lot of comments
basically stating that if I'm investing
in recited this moment in 2019 that I'm
a complete idiot because the market is
about to crash in my face and I'm gonna
lose all of my money is anybody else
getting this is that the housing markets
gonna crash on you the stock market's in
a crash and you the bond markets gonna
crash on you well let's address that
let's see if these people if it makes
sense if their statements make sense and
how we might play the situation if that
is the case in this video I have six
different examples that I've pulled of
REITs some most of them are individual
stocks and I've pulled one ETF that
we're gonna look at we're gonna see what
did happen to these things back in oh
wait
which was the subprime mortgage crash
which primarily affected real estate in
the stock market and let's see what
happened to these things since then and
where we stand today if you're new to
the channel my name is Mike the CPA and
welcome to money in life TV where we
teach finances investing and taxes if
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thank you so much let's dive into it the
first street I want to look at with you
guys is epr properties which is one of
the rates I own in fact many of the
rates we're looking at today are ones of
my port fellow so I was curious of what
would happen to some of my REITs if the
market crashed here pretty soon so let's
start with the dividends and let me zoom
in and hopefully you guys can see this I
wanted to see what happened to the
dividend history of these companies did
the income to keep rolling in so this e
PR has been around since 1997 I'm gonna
scroll down here to 2008 roughly and you
see where this green is right here that
was the highest amount of
paid before the crash hit and around the
time the crash hit during the o8
subprime mortgage crisis if we scroll
down here what I noticed that is unique
to EPR is they're able to keep paying
dividends out well into the future even
after the market started to recover the
market started to recover in 2010 or
2009 somewhere in 2010 is when the
market started to bounce back since 2013
their dividends have been rising back in
value
slowly but surely each year as you can
see as I scroll down here all the way to
2019 where they're now paying but about
37 cents per share but what happened
price-wise let's look at the price
action and the charts which I've
included all of this information just so
you guys know you can look all this
stuff up for yourself it's on Yahoo
Finance that's where I pull most of my
information from for my videos not all
but most of it let me scroll let me zoom
in at the peak which I think was 2007
roughly this 2007-2008 this thing was
sitting at about $68 per share and after
the crash hit it fell all the way to
about $15 per share an 81 percent drop
in value
ouch talk about your punch in the face
quick note here as we're looking at
these guys just know that past
performance does not always dictate
feature performance but I think history
can repeat itself in a very similar
fashion which is why we're looking at
this and how your rates and your
portfolio might behave whether they're
these rates are different rates at least
you'll have an idea of what to expect so
that you don't have a panic attack if
you see your investments drop in value
we we just saw that this investment fell
81 percent but what happened over the
last 10 years this thing if you would
have got in if you would have started
buying back in around $15 per share even
right here which is around $20 per share
look what this thing has done over the
past 10 years it is back up at $77 per
share which is how much of an increase
you would have
quadrupled your money since 2008-2009
roughly average annual return not
including the dividend just from price
appreciation is 38% that's average
annual return pretty impressive you ask
me
throw the dividend on top of there you
guys are looking at what 40 something
percent return every year not bad can
you guys live with a 40 percent return I
sure can
do I care if this thing fell this much
in value not really as long as I have
money in other places I can hold on I'll
be fine and that's why in my last video
I just produced on talking about
protecting yourself a recession I talked
about some of the strategies I use to
not only protect our wealth but to also
then take advantage of future
opportunities that come into play after
a recession
the next retour looking at is the Realty
income trust if I'm saying that right
yeah a Realty income corporation I
should say that's what it's called
ticker symbol is oh and this is one of
the most popular REITs in the market
today and it's been around for a really
long time it's been around guys since
1994 many of the viewers on this channel
weren't very old when this thing started
paying dividends and what's unique about
Oh are the Realty income corporation is
you'll notice that since 1994 they have
had consecutive annual dividend
increases I think for like 26 years 27
years something like that
but you could just scroll down here and
look at the dividend history guys it is
really impressive to me this means
regardless of the market conditions now
if we remember the tech bubble hit in
2000 right that's when the tech crash
happened did this did your income stop
if you own this know your income kept
coming in now your value and your shares
might have dropped but your income still
coming in at least your dividend income
and since then let's go to 2008 what
happened to this thing during the
subprime mortgage crisis did they drop
their dividends no they've always been
really conservative with their payouts
therefore they were able to keep
increasing their dividends even through
a major crash which is really impressive
and even today if we keep going notice
how the dividend just keeps increasing
and
of 2019 we're sitting at 22 cents per
share
very impressive I'm very impressed with
Realty income corporation how have they
done price wise okay in 2008 this thing
was sitting at roughly $28 per share
give or take
that was the high before the crash so I
went from 28 dollars a share down to $15
a share which really is not a bad drop
we just looked at EP R how much I've
dropped it have guys 81% not the real of
the income corporation I think it's
because they're more conservative with
their finances and they've done a much
better job managing the company 46
percent drop not bad considering some of
the other reefs were about to look at
since then this thing has gone up from
$15 a share all the way up to $78 per
share in 2019 of where we're at today
that is a 420 percent increase in value
since the over the last 11 years once
again that is an average annual return
of roughly 38 percent so so far we've
looked at two REITs and the average
annual return on both of them has been
38% throw the dividends on top of that
we're looking at 40% return per year is
your guys stress going down now looking
at these things I mean as long as you're
holding on to these things and investing
more you're doing fantastic the next
company we're looking at is crown castle
International Corporation now I don't
have i couldn't access the complete
dividend history on this one guys I only
have dividend history since 2014 as you
can see but at what you can see is since
2014 they continue to do what what do
you guys they keep paying us more and
more and more to be a shareholder of
their reap or their real estate
investment trusts I'm happy with that
what happened to this thing in 2008 so
in 2008 this thing was sitting at
roughly if i zoom in I'm thinking that
this was about 48 bucks in dollars in
value in 2008 and then it failed to this
point so it fell from 48 bucks roughly
to about I think it was like 14 bucks
let me go down here all right a 20 bucks
sorry 20 dogs so it fell from 48 to 20
and the crash at the low
price that's a 58% decrease in value
ouch can we live with that well what
happened since then
this thing has had amazing amazing
performance since then look at this
since 2009 roughly this thing has gone
up five hundred and eighty five percent
in value holy that means guys over the
past ten or eleven years you're getting
an average annual return of 53% every
year and this on your money if you would
have got in back in this time period and
when did this the market really start to
rebound guys let's just take a moment to
look at that well as we can see the high
and Oh 8 was right here right and the
low was right here it'll at this point
at this price level we're now matching
the high of Oh 8 right and this is where
the breakout starts to occurs right here
so since 2011 since 2012 the market
started pushing back up it really broke
out to new highs at that point until
then so it took from 2009 to 2012
roughly to start to break new highs but
the market started going back up though
sometime in 2009 all right this is
another realize it's the nhi it's the
national health investors corporation
basically what they do is they own
senior living facilities and different
health care facilities around the
country and basically senior living like
said Senior Living retirement kind of
homes stuff like that that's what they
owned by the way guys if you want to
learn more about the companies we're
discussing in today's video I'll link
the last video I did on the REITs I own
I own seven different rates currently in
my portfolio and I go over the quick
background in the history of many of
these rates in that previous video I'm
gonna link that in the description and
the comments section below if you guys
want to check that out ok this thing has
been around since 1991 so let me zoom in
on the dividend history here so you guys
can see this and if we scroll down to
2008 notice that that's maximum dividend
payout before it started to drop was 69
or 69 cents per share
after the crash they lowered their
payout a little bit but notice now we're
talking about health care here ladies
and gentlemen health care do you think
your health cares whether the markets
going up or down no your health doesn't
care you think they're gonna shut down
Senior Living facilities and hospitals
and things like that if the market goes
down no they can't they have to keep
these buildings operational it's part of
the public health public safety and all
these things we have to keep these
things going they're gonna find a way to
keep these services in place so people
can get their health care provided right
what's impressive about nhi that really
impressed me looking back at the history
the dividend payout history of this for
each share or you know each time they've
paid a dividend is they've kept they
were able to keep increasing it and tell
about 2013 they had a small blip but
look it over although do you guys notice
that the trends going up I certainly do
look at this 77 cents per share in 2015
they're paying the 85 cents and as of
2019 they're paying a dollar and five
cents per share not bad let's look at
that cheer price guys and I'm going to
you guys can see the graph here in 2018
the high was around $36 per share right
here it fell to a low of about $20 per
share in a 809 sorry $18 per share when
I looked closer at the graph when I was
doing the research 50% decrease in value
50% drop but since then now it hasn't
had the explosive performance as the
other REITs did but even even so even so
guys since 2009-2010 if you would have
got back in at that point around this
$18.00 mark $20.00 mark 300 average or
300% return almost three hundred fifty
percent return over the past in total
over the past ten eleven years which is
about 30 percent return per year there
divin the payout so like five or six
percent their yield is so you're looking
at a thirty six percent average annual
return if you include the dividend now
let's look at the lr and I just want to
know real quick guys do you know do you
get this a lot
some now my family understands that I
like investing and they're actually
really positive about it they think I'm
smart for doing it they think I'm smart
for what I'm doing on you too
they think they think my overall plan
this is secure and sound and they see
that I have a I'm going somewhere that's
that's what my family sees but I've also
encountered just in the general public
if you're talking to somebody about
investing I've also encountered the
other experience and I don't know if you
guys runs this sometimes but if you're
mention that you're investing you have
anybody just snap at you just like oh
you're it you're a fool
you're gonna lose all your money that's
you know that's a con man's game this
and that now could these investments
drop in value any investment we own
absolutely it could happen and you know
I've had people in the past if something
drops even like in 2014 I think it was
when the market took a steep drop and
even an 18 when the market took a steep
drop towards the end of the year people
were like ah I told you Mike not to
invest your you're a fool for investing
base that basically that's how they came
across to me but when you look back at
history and you see where things can go
and you see it and you're like okay well
do I have my ducks in a row and can I
pay my death so I've cashed them it yes
I've all my investments or my
investments secured do I need the money
from these investments no well then I
can ride this thing out right I can
write it out and if I know how to use
inverse Heath yes I know how to use
other other types of investments in my
portfolio I can actually make money
while the markets going down so I don't
know I just wanted to mention that
because I think if you talk to people
about investing you're gonna get a lot
of criticism especially with real
estates and they're saying how
everything's inflated right now which I
think it is I think this will eventually
come down not saying it will I don't
know for sure but just something to look
out for let's talk about DLR real quick
DLR has been around since 2004 or at
least that's when they started paying
dividends if now they own technology
right they rent out cloud accounting
servers and networks and things like
that in 2018 they were paying roughly 31
cents per share then did their business
now like I said they're more of a
commercial kind of company and serving
businesses did they have to decrease
their dividend no they did not and look
at since 2008 they've been able to keep
increasing their dividend every single
year - now with the dollar 8 per share
so the point of all this guys as I'm
showing you these different investments
is to just show you that yes a market
crash can greatly impact the stock price
the share price of these investments but
it doesn't mean your income is gonna dry
up your income is gonna keep coming in
and boy oh boy if the market crashes I
am ready to buy
oh-ho I am ready folks and I hope you
are too get yourself in that position
because I would love to buy to get a
return of like thirty percent per year
that would be fantastic right
in 2008 the high on this was $50 per
share okay and it fell to $20 per share
60% drop ouch
but if you would have held on and if you
would have started adding more to your
position at that point guess what you
since 2009 to now you would have made a
five hundred and fifty percent return on
your money which is roughly 50 percent
per year throw the dividend on there
which is like three percent annual yield
you're looking at fifty three percent
average annual return whew good stuff
guys good stuff and the last one because
I know a lot of you guys out there who
like investing it like doing it through
ETFs now I enjoy doing a mix of ETFs and
individual stocks as you can see with my
rates I like owning them individually
but you know as often though this ETF it
does pretty darn well guys so look at
vnq and fidelity has a real estate
investment trust index fund as well that
you might consider looking at all right
so what's interesting about vnq which
owns I think like 200 different REITs
within its portfolio because they have
good companies in there and bad
companies your well diversified but your
dividends are kind of gonna be all over
the place because they have good and bad
and average companies right it's all
Mick but 'old in there and so you got an
overall feel for that real estate market
in that sector what you're gonna see
here with the dividend payout is it's
kind of been all over the place its
highest payout going back in time was in
2006 one dollar and four and 49 cents
per share roughly after 2008 the one
those REITs took a dive the dividend
took a dive as well so
what kind of all the different companies
this thing holds but notice the dividend
went to $37 30 cents per share and since
then it's kind of been sporadic since
that time period now even even since
2013 2015 it's kind of all over the
place so you're getting ups and downs
highs and lows the average of all this
if I just highlight all this it looks
like their average dividend payout in
over the history is 72 cents per share
about 72 cents looking at its history
since 2004 now many of you think because
you're in an ETF that your investment
safe and sound because you're well
diversified what you're gonna see though
is if you're concentrated all in one
sector like this thing is it can go down
just like an individual stock and let me
show you how let me show you how that
works so look at this thing back in 2008
that was the high the high was $64 per
share and this puppy fell all the way to
roughly I think it's about 18 yeah
$18.00 per share roughly 72 percent drop
in value 72 percent even in an ETF guys
it can still fall like a rock I don't
want you to ever have the impression
that it can't even even though it owns a
lot of different stocks if all the
market goes down these things go down
with it but as you can see guys since
the last recession this thing has gone
up 400% in value you're getting an
average annual return of 37 percent
throwing the dividend yield on top of
that you're about a 40 percent average
annual return every single year since
2009 it's been doing great I highly
recommend V&Q I think in 2019 or in this
year I think it's up like close to 30
percent it's like 25 percent 30 percent
maybe maybe I said let me know in the
comments but it's up there it's up there
so if you've owned this you're doing
well and congratulations we just looked
at six different investments we looked
at one ATF vanguards vnq the real estate
index fund and then we looked at five
other wreaths that are popular out there
that a lot of different people own
including myself now let's look at the
summary page if you were investing if
you've held on to these things you
didn't sell off during the crash and you
just keep kept adding to Europe
addition over time kept adding more and
more shares how would you have done
let's look at the summary in summary
when we look at that history the average
share price drop of these six
investments during the 2008 crash was 61
percent now that sounds horrible right
that sounds horrible but knowing the
history of where these went after the
crash do you think you guys can stomach
a 60% drop I sure can
I mean I'm young enough to take the risk
now if you're near retirement you might
not be able to you might want to sell
off some of those shares or maybe move
parked move some of your money out of
equities into something else but if you
want to ride it out your income would
have kept coming in would there be some
volatility in your dividend payouts a
little bits a little bit but as you can
as you saw most of the dividends that we
saw went up in value or didn't go down
very much even after the crash if you
had a diversified portfolio your income
just kept coming in and if you added
more to that you just did better and
better and better so the average annual
return for these sex investments since
2009 and when the market slowly started
coming back now remember the market
broke a new high and started becoming
bullish in 2012 sometime in 12 you would
have made 38 percent per year on average
every year if you would have bought in
at that point not bad at all that means
if you had 10,000 dollars invested your
money basically just turned in to close
to 40,000 if you invested a hundred
thousand
I would love to do if the market crashes
then you basically quadrupled your money
your 100 grand just became 400 thousand
as you guys can see there's a lot of
potential here and I wanted to just
cover this stuff with you guys because
there was a lot of heat I was taken to
the comments saying basically saying
like you're an idiot this is gonna crash
in your face you're gonna lose all your
money
blah blah blah blah blah yes well my
investment go down like a rock yes
I'm fine with it I'm not sweating it as
long as the company as long as a
long-term investor do I care so much
about the price
movement of this no because what I'm
investing in her REITs I'm investing for
income I'm not necessarily investing for
growth it's nice to have growth and as
you guys can clearly see here we get
growth from these things as well but I'm
not trying to trade them like a stock
I'm as a long-term investor this part of
my portfolio I'm looking for income and
the income I've it's been proven keeps
coming so I'm not worried about a major
drop in the market and if it does drop
like I said I'm going to definitely add
more and participate in buy more average
now my customer shares
I'm gonna try to figure out when this
markets gonna level out if it does crash
and then take advantage it from there am
i saying the mark is gonna crash no do I
know for sure it's gonna crash no but I
just wanted to show you the history of
these things guys and how much
opportunity you have if you're ready for
it if a crash does comes also to not
panic if something like this happens all
right guys well that is all the
information I have for you in today's
video I hope you got a lot out of it and
I hope you this gives you perspective of
where we might be going and how much you
could benefit from a crash if it does
come either way I'm still gonna be
investing for the long term and
utilizing some other strategies as well
than I'm currently learning
all right guys with that being said if
you like today's video make sure to let
me know by dropping a like in the
comments below guys let me know how does
this impact your overall perspective on
Reese now that we've gone over this do
you are you worried now about losing 60
percent in value do you like him even
more now seeing how they performed after
the crash you know what's your thoughts
I would love to hear those in the
comment section down below also let me
know if people call you an idiot for
investing in these things knowing how
high real estate is I get comments like
that all the time so I'm really curious
about what you're experiencing out there
in your perspective with that being said
thank you so much once again guys for
spending time with me here on the
channel it means the world to me you
guys are family to me and I just really
appreciate you being here if you're new
to money in life TV make sure to
subscribe for weekly videos on finances
investing and taxes have a great week
everybody use this information to live
your life on Kage and I will see you all
in the Nick
video piece guys love y'all
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