I have read your posts under many stocks and respect your opinions highly. I owned many REITs in 2000 and did well, but I have been mostly in cash last 1 1/2 years. I recently retired and have started rebuilding an income portfolio. I would sincerely appreciate your thoughts on the best 3-4 REITs at this point in time, considering current price, yield, growth prospects, and safety (management, properties, leverage, etc).
I fully accept all of my own investment risk, but your thoughts would be helpful
Very difficult question. Reason is that reit prices are very high right now.
Since you have recently retired I will make a presumption that you would be more interested in stronger reits with good dividend growth prospects.
Before I answer tell me what reits you owned in 2000. Did you thru your own DD find any that would interest you longer term? I guess I'd like to know how you played reits in 00 and how you intend to play these 3-4 reits in retirement.
Fortunately, it was not hard to make money in REITs in 2000. As I do not have a real estate background, I diversified among perhaps 10-12 REITs across many specialities (e.g. health care, lodging, office properties, etc.). I looked for decent, but not highest yields with some track record of growth, stable but growing earnings, etc. I did lose some money on TEE. Otherwise, as I recall, all the rest were profitable. I owned BOY, but was out with a profit before the drop. Others I recall were HCP, HR, FR, KRC, LRY. There were more.
My situation is that I do not have to invest today. I have laddered fixed income out about 10 years, as I think there is some risk of meltdown in the world economy (not a prediction, just a precaution). My interest in REITs is that I believe the investment climate has changed semi-permanently from the 90's, and that dividend paying stocks will do best for most of this decade. That seems to highlight utilities, REITs, and tobacco companies. REITs are the more comfortable choice for me at this time.
I can do stock screens for earnings consistency, ratios, etc. (which I have done) - but I do not have the knowledge to evaluate properties, management, etc. - and those two things seem most critical to me in a soft economy. That is why I appreciate your views.
I will likely not invest more than 2% of my portfolio in any one REIT, so while I don't wish to make any dumb investments, no one mistake will put me at much risk. I currently hold HR (from 2000) and FR (back in earlier this year).
I hope this addresses at least some of your questions.