Fwiw, I'll take on a few shares of real-estate closed-end fund RIT. (-g-)
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On the one hand, real estate companies -- reits-- have really done so well the past few years compared to other investing areas (mid-cap growth, value, other fund types), that one has to wonder if the real estate appreciation in these sectors - apartments, commercial, etc. has about peaked. OTOH, we still see interest in acquiring reits, such as the take out of apartment reit, Archstone-Smith Trust, a couple of days ago.
RIT consists of a bunch of reits, preferred stocks, and repurchase agreements (unfathomable stuff, repros, to me) in different USA real estate sectors. It's a closed-end fund that sells close to nav. Seems like they are trying now for a consistent monthly dividend; if the div. is sustainable at current .19/sh per month, the yield now is $2.28/$24 or about .095 = 9.5%. That's not possible based just on the dividends of the underlying reits in the fund. It is being done by trading and hedging by RIT fund management. Whether fund management can continue to do this successfully, I do not know.
Given the generous (although perhaps risky) yield, the broad diversity of stocks held in RIT, the professional management of RIT by Legg Mason, it's my opinion this stock might/could/may be suitable for a 'mom account' where for a few shares in her portfolio, mom has a shot at spiffing up her dividend income a little.
Jmo, and I've been wrong many, many times. |
