Amid prevailing macroeconomic uncertainty, REITs could be promising investment vehicles as they can offer an efficient and cost-effective means of generating steady income and capital appreciation while diversifying your portfolio. Generally, REITs that invest in various types of real estate have an advantage over REITs that focus on a specific area.
Thus, it could be wise to invest in fundamentally sound, top-rated diversified REITs CoreCivic, Inc. (CXW – Get Rating), Ladder Capital Corp (LADR – Get Rating), and Whitestone REIT (WSR – Get Rating) for a stable income stream.
The Labor Department reported that the Consumer Price Index (CPI) increased 0.4% last month and 3.7% year-over-year, above respective Dow Jones estimates of 0.3% and 3.6%. The data follows a stronger-than-expected producer price index reading for September. Hot inflation data reignited interest rate fears.
With solid recent economic data bolstering the case for another interest rate increase, enhanced economic uncertainty, and growing geopolitical instability due to the ongoing conflict between Israel and Hamas, the stock market will likely remain highly volatile in the near term. Amid macroeconomic uncertainties, REITs stand out as a promising investment choice.
By law, a REIT must pay at least 90% of its taxable income to shareholders in the form of dividends, providing investors with a passive income option. In addition to a steady income stream, it can diversify a portfolio and act as an inflation hedge through real estate appreciation.
Diversified REITs are often considered ideal investment vehicles due to low risk, as companies in this industry primarily own and operate income-producing real estate across a wide range of properties, including retail, industrial, healthcare, and residential buildings, mitigating the risk of losses if a specific sector underperforms.
With these favorable trends in mind, let’s delve into…
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