Buy REITs for Growth

The recent rally of real estate investments trusts is a vote of confidence in the strength and staying power of the recovery.

After watching real estate investment trusts for 25 years, I've finally figured out why property-owning REITs always seem to be on the upswing: REITs are a bit like chameleons. When bonds are in favor, investors reward REITs by treating them as if they were bonds. When bonds fade and stocks ascend, the market regards REITs as if they were dividend-paying growth stocks. It's only when just about everything is tanking, as was the case in 2008, that REITs get hammered.

Strong Gains

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Jeffrey R. Kosnett
Senior Editor, Kiplinger's Personal Finance
Kosnett is the editor of Kiplinger's Investing for Income and writes the "Cash in Hand" column for Kiplinger's Personal Finance. He is an income-investing expert who covers bonds, real estate investment trusts, oil and gas income deals, dividend stocks and anything else that pays interest and dividends. He joined Kiplinger in 1981 after six years in newspapers, including the Baltimore Sun. He is a 1976 journalism graduate from the Medill School at Northwestern University and completed an executive program at the Carnegie-Mellon University business school in 1978.