Steve asked:
> Was I reading too much into the following? :
>
> >AIUI (confirmation, Eugene?) BW manages its investment property
using
> >the conventional principle that real capital value must be
maintained
> >or increased as the *first* priority, and income generated and
taken
> >second.
> >
> >There is a conventional practice for comparing such a portfolio
with
> >how it was at some chosen previous time. Just boring bookkeeping
> >really -- no clever stuff. This is to appraise all the
properties at
> >market value (i.e. what they would fetch if sold) in both cases,
using
> >market parameters current at the time of the valuations, and
adjust
> >the total value of one (usually, the past one) by the inflation
that
> >has occurred since the chosen past date, and by any capital
added to
> >or removed from (i.e. not reinvested in) the portfolio during
that
> >period.
> >
> >My impression (I'm too lazy to do the tedious investigation) is
that
> >the value of the portfolio has been growing steadily, as well as
> >providing useful income (again, confirmation, Eugene?).
>
> If you're never going to sell it why the interest in whether it is
> managed on that basis? Adrian are you around to clarify?
I read that particular statement as saying that you keep a close eye
on property values and wheel and deal with your portfolio, just as
you would if they were shares or building society accounts, to
ensure that the capital value increases or is maintained while
getting the income from it. That, surely, is prudent financial
management and if it means selling one bit to fund buying an even
better bit (or a bit with more future potential) then so be it, IMO.
Roger
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