I have too much in regular stocks. Would like to diversify. I think even more inflation is coming. So real estate seems good - it has to rise with inflation generally. Hence REITS. But what about the rising interest rates? Can any REITS (including categories of REITS) hold up well against rising interest rates? Last think I want to happen is stocks tank due to rising interest rates then there go my REITS too haha. Thanks!
Might find ideas here: https://seekingalpha.com/author/rida-morwa https://seekingalpha.com/author/brad-thomas https://seekingalpha.com/author/hoya-capital
Some REITs invest directly in real estate, e.g., they are landlords, and they own shopping malls, or medical office buildings, or hotel properties, and the income is rent. Other REITs invest in debt instruments secured by real estate, i.e., mortgage loans or mortgage-backed securities. If you want something that is not very sensitive to interest rates, guess which type of REIT you want to avoid?
I'm a fan of standing timber MLPs. Rates of return are fairly consistent and solid over the long haul.
MLPs and REITs are very similar to stocks, except they are taxed much more harder (from viewpoint of the holder). Though, the org itself does not have to pay this tax, it just passes that haircut over to YOU. Because they are still similar to stocks, this means they will go down (like most stock correlations do) when the interest rate goes up. Conversely, bonds will go up in value as people rotate out of stocks and move into bonds. Disclaimer! I'm not saying that bonds won't still be SHIT for 2022, (they most likely will be), but this is not financial advice. For that, you need to listen to some millenail tik-toker who still knows everything before they get out of their teens.
Thanks so much guys, I realize I put MLPs in the title when I meant REITs. But both are interesting. One thing that bothers me is in the 2008 crash both apparently did awful, not much if any better than the stock market generally. I really wish there was at least one category of assets that clearly outperformed in the 2008-2009 crash...