3. INVESTMENTS IN MARKETABLE SECURITIES

6 Months Ended

Jun. 30, 2014

INVESTMENTS IN MARKETABLE SECURITIES

INVESTMENTS IN MARKETABLE SECURITIES

3. INVESTMENTS IN MARKETABLE SECURITIES

Investments in marketable securities consist primarily of large capital corporate equity and debt securities in varying industries or issued by government agencies with readily determinable fair values. These securities are stated at market value, as determined by the most recent traded price of each security at the balance sheet date. Consistent with the Company’s overall current investment objectives and activities, its entire marketable securities portfolio is classified as trading.

In April 2014, the Company purchased approximately $3.5 million of preferred equity of large capital real estate investment trusts (REITS), consisting of approximately 20 preferred stock positions with no one position exceeding $400,000 in value as of June 30, 2014.

In March 2014, the Company purchased approximately $3.5 million of marketable securities consisting of approximately 50 common stock positions in large capital REITS. No one stock position of this purchase exceeds $400,000 in value as of June 30, 2014.

Net realized and unrealized gain (loss) from investments in marketable securities for the three and six months ended June 30, 2014 and 2013 is summarized below:

	Three months ended June 30,					Six months ended June 30,
Description	2014		2013			2014		2013
Net realized gain from sales of securities	$	34,000	$	11,000		$	46,000	$	8,000
Unrealized net gain (loss) in trading securities		477,000		(81,000	)		592,000		25,000
Total net gain (loss) from investments in marketable securities	$	511,000	($	70,000	)	$	638,000	$	33,000

For the three and six months ended June 30, 2014, net unrealized gains from trading securities were $477,000 and $592,000, respectively. This is compared to net unrealized (losses) gains of ($81,000) and $25,000 for the three and six months ended June 30, 2013, respectively. The increase in unrealized gains was primarily from REIT marketable securities purchased in 2014.

For the three months ended June 30, 2014, net realized gain from sales of marketable securities was approximately $34,000, and consisted of approximately $46,000 of gross gains and $12,000 of gross losses. For the six months ended June 30, 2014, net realized gain from sales of marketable securities was approximately $46,000, and consisted of approximately $80,000 of gross gains net of $34,000 of gross losses.

For the three months ended June 30, 2013, net realized gain from sales of marketable securities was approximately $11,000, consisted of all gains, no losses. For the six months ended June 30, 2013, net realized gain from sales of marketable securities was approximately $8,000, and consisted of approximately $31,000 of gross gains net of $23,000 of gross losses.

Investment gains and losses on marketable securities may fluctuate significantly from period to period in the future and could have a significant impact on the Company’s net earnings. However, the amount of investment gains or losses on marketable securities for any given period has no predictive value and variations in amount from period to period have no practical analytical value.