REITs Offer a Compelling Anchor and Booyah!
That translates into one thing: FEAR. That makes it most difficult for investors to predict where to zig or to zag, making stock selection increasingly difficult. So where do intelligent investors find the next pockets of opportunity, especially the companies that earn excess of returns over long periods of time?
REITs: The Anchor and the Buoy
Oh yes. Don't you remember? REITs payout more than at least 90% of their income to their shareholders in the form of dividends, and you pay taxes only when you decide to sell. Another key differentiator for REITs, compared with non-REITs, is total return ingredients. Remember that a non-REIT stock is anchored by capital appreciation and dividends are simply the "icing on the cake." However, REITs are just the opposite. In fact, REITs, on average, return 60% of total return in dividends -- making dividends the anchor and growth the buoy.