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How i got talked out of 8 1/2 % bonds
Old 06-11-2017, 05:48 PM   #1
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How i got talked out of 8 1/2 % bonds

Here is one of my many stories. In 2007 i knew i was packing it in(retiring). I kept hearing on the radio about markets go up/ markets go down, why take the risk . Sleep better at night, get bonds. I believe the rate quoted was 8.25 %. Mind you, this was the summer of 2007. I discuss this with the bride. i said we have enough , why risk it. lets go get these bonds. She said o.k. I go with my checkbook im going to make this happen. I arrive at the place in long island early for my appointment. Get a free cup of coffee. The representative (salesman), comes in and i tell him i want this bonds. We discuss how much im going to invest, my net worth, etc. I dont remember the maturity dates ,maybe 25 years out, maybe more. He tries to build up a relationship with me by telling me he was a retired cop too, since i have these assests i should buy these Apple Reits. That im basically giving away a 18 % return vs the 8.50 % that i want. Reits? I never heard of this before. 18 % returns? He shows me charts and brochures and all sorts of things. So what do i do? I hear 18 % and everything else is blah blah blah. I manage to remember that the bride has authorized me to get these 8.50 % bonds. Not some wacky 18 % reit that i just learned the definition of. So i come home empty handed, except for the brochures for this lock 18 %.


yeah, so now im all goofed up, i wanted the bonds, but he threw a monkey wrench into the equation. Do i get the bonds? Why should we pass up on this 18 %. So what do i do? Nothing, thats right, the money stays in the checkbook. I know 18 % sounded too good to be true. It was what the first people got when they invested in this REIT years earlier. But this is me, im usually the loser in these get rich schemes. Then the market plummets for the next 2 years. My 8.5 % bonds that i missed out on, when i would think about them, i would want to beat that salesman up. The reits ? hahaha they were garbage. tons of lawsuits. They really were worth about 3 dollars a share. People were only allowed to cash out i think 5% of them a year, so it will take 20 years to unload these dogs. In the 2 years that the market was in a melt down, i started reading about investing instead of listening to salesmen on the radio. If i would have gotten the bonds i would have been happy and our asset allocation would have been about 80% 8.5 % bonds for 25-30 years.


Thats my story,
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Old 06-11-2017, 05:55 PM   #2
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You should have asked the salesman how much he had invested in the 18% REITs he was selling.
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Old 06-11-2017, 05:58 PM   #3
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You should have asked the salesman how much he had invested in the 18% REITs he was selling.
I found out through the lawsuits they got 10 % commission.
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Old 06-11-2017, 05:59 PM   #4
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Sounds to me like you got away from a place that would have taken you for what you had.... be glad that you did not buy...


But, I will ask... what was the ticker of the bonds Or, if no ticker the name of the bond... full details so we can look it up..


BTW, you can get higher than 8.5% right now if you want... just have to take the risk of a very low rated bond...
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Old 06-11-2017, 06:01 PM   #5
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Good story. If you had gone there with a specific asset allocation in mind, I wonder if you would've gone thru with the bond purchase. It seems like your approach was to go all-in before you became more informed.
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Old 06-11-2017, 06:04 PM   #6
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Sounds to me like you got away from a place that would have taken you for what you had.... be glad that you did not buy...


But, I will ask... what was the ticker of the bonds Or, if no ticker the name of the bond... full details so we can look it up..


BTW, you can get higher than 8.5% right now if you want... just have to take the risk of a very low rated bond...

i can give you the the apple reit that i almost got sucked into. as far as the bonds i dont have a clue, i think they were for dormitory, or a prison, or a water project. We never got that far, i assume you can look up what bonds were available the summer of 2007 that paid 8.5 %. i dont know how to do that. http://www.girardgibbs.com/apple-reit-lawsuit/. thats the link that tells some of the story.
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Old 06-11-2017, 06:14 PM   #7
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There were no 8.5% bonds. It was just a teaser to get you into the office. It was probably 8.5% for the first year only or 8.5% but limited to $10k max. So don't feel like you missed out on something.
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Old 06-11-2017, 06:37 PM   #8
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And they might have been callable.
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Old 06-11-2017, 06:51 PM   #9
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If you had just bought Apple in 2007 and let it ride through the drop and subsequent climb, you would have a gain of about 600%. Too bad you didn't misunderstand the guy when he said buy apple reits.
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Old 06-11-2017, 07:55 PM   #10
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If you had just bought Apple in 2007 and let it ride through the drop and subsequent climb, you would have a gain of about 600%. Too bad you didn't misunderstand the guy when he said buy apple reits.
NOT APPLE< Apple reit i think it was apple 9 or 10, the bond, nothing to do with the company apple
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Old 06-11-2017, 07:57 PM   #11
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There were no 8.5% bonds. It was just a teaser to get you into the office. It was probably 8.5% for the first year only or 8.5% but limited to $10k max. So don't feel like you missed out on something.
can you provide the link you found to search bonds available in 2007? it was going to be for way more than 10k. I wouldnt doubt it was some fake teaser tho
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Old 06-11-2017, 07:58 PM   #12
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And they might have been callable.
back then, i didnt even know what callable was. probably right if they existed they might have gotten called
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Old 06-11-2017, 08:35 PM   #13
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10 year treasuries only got up to 5% in 2007, so I wonder what kind of bonds these were?!?
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Old 06-11-2017, 09:03 PM   #14
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I am sure there is a way to look up the bonds issued that year, but there are probably thousands of them... there is no way to know what was being offered....

It is interesting to look... 10 year treasuries were paying between 5.6% to just over 6% at that time... 8.5% was not that good of a rate... hope it was investment grade at the time...

Seems we are so used to these low rates now we forgot how much interest we used to get!!!
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Old 06-11-2017, 09:10 PM   #15
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+1 My broker was pushing QLAC to minimize RMD's but I read an article that said that 15 years later you were lucky to get your original investment without any growth.
My original broker retired, and this lady was trying to make some $$ off me-Nevah hoppen LOL
She also said that my tax free and dividend investments were half of my portfolio and were at risk if interest rates went up.
I told her I was not worried, as i had other investments elsewhere
That shut her up
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Old 06-11-2017, 09:55 PM   #16
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10 year treasuries only got up to 5% in 2007, so I wonder what kind of bonds these were?!?
If i remember correctly, they were either 25 or 30 year bonds. I never got the fat details because this salesman diverted me to this alternate item. I had checkbook in hand to fork over over 400k.
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Old 06-11-2017, 10:03 PM   #17
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Since the "better" investment they tried to steer you to turned out to essentially be a scam, I wouldn't be surprised if those bonds only existed in the figment of their imagination for the sole purpose of steering you to the scam.

Much like going into a store advertising 50% off some item, but then finding they are out of the item but they have a better one that you should consider...
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Old 06-11-2017, 11:51 PM   #18
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I like your story, I have one too! A friend put me in annuity and I suffered for 5 years thank goodness I found this site.......thank you early retire.org

I got out and rolled everything into my 401k and have it invested in vanguard funds. Currently at 8% returns. 8 from 2 is GREAT STUFF


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Old 06-12-2017, 05:15 AM   #19
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Apple Real Estate Investment Trust is still a going concern and it looks like Apple Seven and Eight got rolled into Apple 10 and then maybe merged with Apple Hospitality. Shady dealings....if you are bored...

https://www.sec.gov/litigation/admin/2014/33-9548.pdf
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Old 06-12-2017, 05:53 AM   #20
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next year I have some good size cd's coming due and was thinking about a portfolio of wels/wel 50/50 and just let it ride for retirement. Is this a good Idea? people say the interest rates on cd's are going to be a long time coming back, so what are your thoughts? couch potato portfolio maybe. but I don't know enough about investing to get too complicated.
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