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Another good question. I am not talking about mortgage REITs (Bonnie is) She understands them well enough to buy the safe ones, I presume, but I see these as land mines. They are highly interest rate sensitive, and depend greatly on the ability of management to reinvest. I much prefer REITS that own property that I can see, touch and value. Be careful though if you don't know real estate. There are some dogs out there with high yields, where the property is troublesome. If you read about the company and the property sounds weird, stay away. Waht you are looking for are solid office buildings, retail properties, apartments or warehouses. What I like about real estate is that you know its not going anywhere. The Dow drops 5000 points and interest rates go up, you can still go bang on the walls of your building and be pretty confident that most of the tenants will still be paying rent. That gives me much greater comfort than some virtual company. Not that you can't make money on mortgage REITs if you know what you're doing. I don't. |
