Zero? I seriously doubt that zero is the future value of RNP. I bought my first shares Feb. 9, 2006, and yes, I have a paper loss. But, I am accumulating at today's prices, and that will reduce the average cost per share. During my ownership, the fund has paid dividends every month, and declared special distributions for 2006 and 2007. REITs will come back, and the investors buying today will, at some time in the future, be happy for their decision.
Sure we have an unemployment rate slightly less than 5%, but what about the 95% that are employed? Maybe the actual number employed is less, but I believe the economy is sustainable. For the past two years, I have been hearing and reading that the consumer is tapped out. Maybe that will be true this year, and maybe it will never be true. We are creatures that like to buy things; we charge, and then we charge some more. The news told us that Macy's is closing nine department stores. That is a remarkable piece of news, because Macy's is planning to open thirteen new department stores in 2008-2009. Macy's must not think the consumer is tapped out. Consider all the Macy's that exist in mall REITs. There are so many kinds of REITs, and anyone who thinks that sector will disappear is wrong.
Another thing to consider is the baby boomer generation. I believe that group has reached retirement age. They will be looking for sources to provide investment income. At its current yield, RNP is attractive.
The current issue of Barron's indicates RNP is selling at a discount of 12.6%. That tells me RNP's price is a bargain, and today's price will result in a 12-month yield in the high teens.
I do not know how low RNP will get, but I hope the factors that I have presented will have a positive impact on price. Since no one can accurately predict the future, only time will tell. Going forward, I am positive that I am doing the right thing buying RNP stock.