How does a hefty dose of income, the safety of a physical asset and great capital gains potential sound to you?
Well, if you’re an investor in or about to enter retirement, that can be great news. And this is no siren song — real estate investment trusts, or REITs, can deliver all three to a portfolio.
Created by Congress in 1960 to give Americans the opportunity to easily invest in commercial real estate properties, REITs feature the best combination of attributes for retirement investors. REITs trade on the major exchanges just like regular stocks, and in exchange for tax benefits at the corporate level, REITs also kick out some nice dividends.
Today, REITs own a variety of property types — from office buildings and apartments to shopping malls and even computer data centers. Not to mention, the several that own the mortgages tied to these properties. And given how big the sector has gotten over the last few years, navigating the REIT waterways can be tricky.
How exactly should retirement investors go about adding healthcare stocks to a portfolio? We look at a few ways to do it — namely, a stock, an exchange-traded fund (ETF) and a mutual fund to get you started.