Please enable JavaScript to view the comments powered by Disqus.
Slide Show

1 of 8

Practical Advice from

The 7 Best REITs to Buy for High Yield and Growth

iStockphoto

Real estate investment trusts (REITs) really took a beating in the second half of last year. From the late summer peak through the post-election trough, the Vanguard REIT ETF (VNQ) shed 17% of its value … at a time when the broader market has been flying high.

It seems that if you live by the yield, you die by the yield, and the selloff in bonds in recent months hit REITs particularly hard. Amid the global hunt for income, high-yield REITs had come to be viewed as bond substitutes. So the post-Trump bond dump meant a post-Trump REIT dump.

The thing is, we’ve been here before.

REITs shed around 20% of their value in the 2013 “taper tantrum” and again in late 2015 leading up to the Federal Reserve’s first interest-rate hike in nearly a decade. And in both cases, REIT investors that had the levelheadedness to recognize a market overreaction when they saw one did well. REIT prices went on to rebound to new highs.

It remains to be seen whether REITs will enjoy a comparable rally this time around, but I’m liking my odds. So today, I’m going to recommend seven of the best REITs to buy for a 2017 rebound. It’s a diverse lot hailing from different subsectors of the REIT market, but all pay solid yields and all are still well below their mid-2016 highs.

In these seven REITs, which yield between 4% and 8%, investors can expect current income well in excess of what is available in the non-junk-bond market. And with a little cooperation from Mr. Market, they also offer the chance for capital gains of 20% or more.

This slide show is from InvestorPlace, not the Kiplinger editorial staff.

View as One Page

Check Out

Kiplinger's Latest Online Broker Rankings

Advertisement