Welcome to the August 2009 issue of Condor Monthly!
Please continue below to view the "From the Portfolio Manager" and "Financial Planning Corner" segments in this month's issue.
From the Portfolio Manager
AvalonBay Communities
(AVB)
Large Cap Growth Strategy Update
Condor Capital recently initiated a position in AvalonBay Communities, an apartment real estate investment trust (REIT).
Luxury Apartments in Big Cities
The company’s focus on luxury apartments in urban regions, including the greater New York City area, protects it from excessive competition. This emphasis on upscale, high-rise apartments also provides a barrier-to-entry, since the construction of these buildings is also the most expensive. Additionally, landlords operating luxury apartments have the benefit of making greater concessions to keep price-sensitive tenants from leaving.
The Benefits of a Solid Balance Sheet
AvalonBay’s strong balance sheet and large capacity on its bank line put it in an excellent financial position, especially when compared to the majority of its peers. This flexibility should help the company to refinance and get through any unforeseen troubles that may arise. It is also in a comfortable position to complete all ongoing construction projects without external financing.
Ready For Real Estate Rebound
With the company’s share price dramatically off their pre-recession highs, looming signs of an economic recovery bode well for this apartment REIT. Unemployment rates are expected to taper off within the next year or so, and when this happens, individuals will once again be able to allocate a sizable portion of their paychecks to rent.
AvalonBay is one of the most respected real estate investment trusts (REITs) given its valued properties, solid financial standing, and astute management team. As it is difficult to imagine the domestic real estate market continuing to languish over the next several years, these attractive qualities should propel its stock ahead of the pack when such a recovery does take place. Overall, we feel that AVB presents itself as one of the best investments for patient, long-term investors given its attractive risk-to-reward profile and healthy 5.75% dividend yield, which remains very competitive compared to risk-free assets.
Financial Planning Corner
Condor Capital recently initiated a position in AvalonBay Communities, an apartment real estate investment trust (REIT).
Luxury Apartments in Big Cities
The company’s focus on luxury apartments in urban regions, including the greater New York City area, protects it from excessive competition. This emphasis on upscale, high-rise apartments also provides a barrier-to-entry, since the construction of these buildings is also the most expensive. Additionally, landlords operating luxury apartments have the benefit of making greater concessions to keep price-sensitive tenants from leaving. The Benefits of a Solid Balance Sheet
AvalonBay’s strong balance sheet and large capacity on its bank line put it in an excellent financial position, especially when compared to the majority of its peers. This flexibility should help the company to refinance and get through any unforeseen troubles that may arise. It is also in a comfortable position to complete all ongoing construction projects without external financing.
Ready For Real Estate Rebound
With the company’s share price dramatically off their pre-recession highs, looming signs of an economic recovery bode well for this apartment REIT. Unemployment rates are expected to taper off within the next year or so, and when this happens, individuals will once again be able to allocate a sizable portion of their paychecks to rent.
AvalonBay is one of the most respected real estate investment trusts (REITs) given its valued properties, solid financial standing, and astute management team. As it is difficult to imagine the domestic real estate market continuing to languish over the next several years, these attractive qualities should propel its stock ahead of the pack when such a recovery does take place. Overall, we feel that AVB presents itself as one of the best investments for patient, long-term investors given its attractive risk-to-reward profile and healthy 5.75% dividend yield, which remains very competitive compared to risk-free assets.
Financial Planning Corner
Stat Bank
Over the pa
st year, the substantial amount of turmoil in the financial markets has led to many game-changing events in the industry and in the economic climate in general. Tiburon Strategic Advisors, a market research & strategy consulting firm serving a wide variety of financial institutions and investment managers, has put together a list of some interesting facts about the future of the financial industry.
Consumer Wealth
• The median retirement savings balance of consumers over 60 is only $42,000; many do not have enough money to live comfortably for more than a handful of years.
• The number of consumers collecting Social Security account for 47 million, an increase of almost 40% since 2006.
• Consumer households have over $57 trillion in net worth, an increase of almost 50% since 2002.
• Online banking usage may eventually rival ATM usage.
• The consumer savings rate will likely continue to be near 0.1% until 2012.
Current Events
• Over two-thirds of affluent investors are concerned that future stock market gains will be lower.
• Two-thirds of financial advisors believe the Standard & Poor's 500 will be up 10% to 25% in the next twelve months.
Estate Planning & Insurance Products
• Only three-quarters of consumers believe having a will is important, a 10% decline from 2002.
• Worldwide insurance assets add up to nearly $12 trillion.
Baby Boomers' Liquidation
• There are 77 million baby boomers; they now account for one-third of the total US population.
• The population of people over the age of 65 will double by 2030, the year when the last baby boomers reach that age.
• Nearly three-quarters of recent retirees have either reinvested their 401k into an IRA or are exploring options to move their funds to a new provider.
Substantial Immigrant Impacts
• The number of consumers include 12% immigrants, almost equivalent to its 1915 peak, despite falling to just 5% in 1967.
• Some believe that immigrants (especially illegal immigrants) have saved Social Security because they pay taxes but receive no benefits.
Shift in Investment Holdings
• Current events have led to less confidence in both complicated investment products & certain financial services industry investment channels.
• The number of mutual fund companies offering target date (life cycle) mutual funds will increase.
• The number of exchange-traded funds will increase faster than the number of index mutual funds in the marketplace.
• Hedge funds account for less than 10% of US investable assets, but shockingly account for a quarter of the country's individual stock trades.
Alternative Investments
• An acre of Napa Valley vineyard land averages $100,000 and parcels are not easy to come by even if you have the money.
• Other alternative investments will grow in popularity as both consumers & institutional investors seek out opportunities to earn substantial and non-correlated returns.
• Real estate investments debt is $1,430 billion.
st year, the substantial amount of turmoil in the financial markets has led to many game-changing events in the industry and in the economic climate in general. Tiburon Strategic Advisors, a market research & strategy consulting firm serving a wide variety of financial institutions and investment managers, has put together a list of some interesting facts about the future of the financial industry. Consumer Wealth
• The median retirement savings balance of consumers over 60 is only $42,000; many do not have enough money to live comfortably for more than a handful of years.
• The number of consumers collecting Social Security account for 47 million, an increase of almost 40% since 2006.
• Consumer households have over $57 trillion in net worth, an increase of almost 50% since 2002.
• Online banking usage may eventually rival ATM usage.
• The consumer savings rate will likely continue to be near 0.1% until 2012.
Current Events
• Over two-thirds of affluent investors are concerned that future stock market gains will be lower.
• Two-thirds of financial advisors believe the Standard & Poor's 500 will be up 10% to 25% in the next twelve months.
Estate Planning & Insurance Products
• Only three-quarters of consumers believe having a will is important, a 10% decline from 2002.
• Worldwide insurance assets add up to nearly $12 trillion.
Baby Boomers' Liquidation
• There are 77 million baby boomers; they now account for one-third of the total US population.
• The population of people over the age of 65 will double by 2030, the year when the last baby boomers reach that age.
• Nearly three-quarters of recent retirees have either reinvested their 401k into an IRA or are exploring options to move their funds to a new provider.
Substantial Immigrant Impacts
• The number of consumers include 12% immigrants, almost equivalent to its 1915 peak, despite falling to just 5% in 1967.
• Some believe that immigrants (especially illegal immigrants) have saved Social Security because they pay taxes but receive no benefits.
Shift in Investment Holdings
• Current events have led to less confidence in both complicated investment products & certain financial services industry investment channels.
• The number of mutual fund companies offering target date (life cycle) mutual funds will increase.
• The number of exchange-traded funds will increase faster than the number of index mutual funds in the marketplace.
• Hedge funds account for less than 10% of US investable assets, but shockingly account for a quarter of the country's individual stock trades.
Alternative Investments
• An acre of Napa Valley vineyard land averages $100,000 and parcels are not easy to come by even if you have the money.
• Other alternative investments will grow in popularity as both consumers & institutional investors seek out opportunities to earn substantial and non-correlated returns.
• Real estate investments debt is $1,430 billion.
