Frankly, I think everyone should own a sizable portion of their portfolio in REIT individual funds or ETF’s that have diversified REIT trusts as part of their funds.
What Exactly are REIT’s?
Real Estate Investment Trust (REIT) – These are investment funds that own and manage a bunch of real estate properties – residential, health, commercial – and mortgages.
When the real estate bubble finally went boom, so did a lot or the REIT’s. However, since then they have picked themselves up and are considered, in the financial industries, to be some of the best dividend payers.
Yes, they are more risky. However, as with every sector there are the ‘really’ risky ones and the more reputable ones. I look for both. But mainly I look for the ones that are specializing in particular areas or even better a fund (REIT’s ETFs) that work with some of the best in the industry. Since they can be quite costly on their own.
But the bottom line is this, humans will always need a place to live. People are not stopping their travels and a lot of REIT’s own hotels. And we will always be shopping either online or in malls. I prefer more distribution centers, since I barely shop in malls. But you can decide what you would want if you were buying the actual real estate properties.
REIT’s are kind of like being a real estate tycoon, without the hassle.
The Trader Chick’s Picks for REIT’s and REIT ETF’s
Senior Housing Properties Trust (SNH) – this is an individual trust, not a fund. They mainly handle Senior housing. I know from visiting Florida every year, this is a huge market. Not only active living and senior housing, but health care facilities, assisted living and so much more.
Chesapeake Lodging Trust (CHSP) – This trust mainly works with upper-scale hotels. Since my family and I are big on travel, I have found that no matter how bad the economy is doing, the least effected tourism sector is luxury. With their earnings coming in and the price going way up. I’d say they are doing well for the sector. Plus they offer almost 5% dividend yield.
Vanguard REIT Index EFT – (VNQ) – This is one of the best REIT EFT’s on the market tracking all the top leaders in the REIT industry. Plus, almost a 3% dividend payout.
Market Vectors Mortgage REIT (MORT) – This high yield dividend ETF (13%) works directly with the Market Vectors Global Mortgage REITs Index. In other words, the majority of its assets are US stocks that are being traded that work with mortgages.
iShares Mortgage Real Estate Capped (REM) – This is another ETF that focuses mainly on stocks holding US residential and commercial mortgages. And even though I have MORT, the dividend yield on this ETF was way too tempting – almost 16%!
Marina 'The Trader Chick' Villatoro