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REIT Investors Need to Be Selective

When it comes to finding income, real estate investment trusts (REITs) are often at the top of investors’ lists. Given their tax structure, REITs tend to push out much of their cash flows back to investors as dividends, providing them with often higher than average yields. Add in some of their other benefits – such as low-correlation to regular stocks and bonds – and it’s easy to see why the sector has quickly become a staple in many retirees and income seekers portfolios.

But the global pandemic may have thrown REITs and other real estate stocks into a bit of a tizzy.

Thanks to the pandemic’s wide-reaching effects and potential game-changing shifts, REITs are becoming another “have and have not” sector. Some have gone on to suffer greatly in the current environment, while others have thrived in this new normal.

For investors, it now means that we may have to be selective with our REIT ownership and focus on these winning sectors.

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