For investors about to enter, or already in retirement, real estate investment trusts (REITs) have to be on your list. 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 big dividends (often in the 4%-6% range).
That high dividend, plus REITs’ capital appreciation, has made the owners of office buildings, apartments, shopping malls and other properties tremendous performers over their history. REITs have managed to return an average of 12% per year since 2000. That blows every other asset class out of the water.
A chance for high income and capital appreciation, as well as owning a physically-backed inflation resistant asset — what’s not for a retirement investor to like?
But, where do you begin and how exactly should retirement investors go about adding REITs to a portfolio? At InvestorPlace, we have you covered. Here’s one stock, one exchange traded fund (ETF) and one mutual fund to get you started.