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 REITs
(or real estate investment trusts) are publicly traded companies that
own a pool of real estate properties. After enjoying a brief
heyday in the mid 1990’s, REITs have literally stunk up
the joint. During
the Internet boom, everyone thumbed their nose at any stocks
paying dividends. Because REITs are required by law to
pay out 95 percent of their earnings as dividends, their stock
prices were left behind during the Internet explosion.
For the Rogue Investor, however, REITs investing represents
possibly one of the best and most conservative investments
currently available.
Why?
As interest rates continue to fall, they become more
and more attractive. Many
REITs currently have dividend yields as high as 10 to 12
percent and strong financial positions to weather any storm
and they increase dividend payments every
year. In fact,
because recent events have made international travel less
likely for most people, many REITs stand to benefit.
Also, with the proposed dividend tax cuts, interest in
investing in REITs is likely to explode.
REITs operating and owning
hotel chains, outlet malls, residential apartments and housing
look especially attractive as more time and dollars are spent
locally. Although
there are no guarantees in investing, at current prices REITs
offer possibly the highest certainty for a return on your
investment of 10 percent or better with limited risk.
The best REITs have a consistent operating history, an
investing margin of safety and, when you factor in dividend
growth, the potential for a total return approaching 15 percent
per year. Here are some examples:
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