Hey guys,
I’m checking back in today for an overall portfolio update, as well as giving you insight into the REIT section of my portfolio. My portfolio has done pretty well so far in 2020. The market seems to be bullish on possible additional stimulus, continued low interest rates and the Federal Reserve’s commitment to keeping interest rates low for the next few years. The lifting of the market has also lifted my portfolio to see some early 2020 gains. #portfoliogainz (haha).
Below you will see how my overall portfolio is doing since I started. We’re up a good bit and we’re also beating the S&P 500 again in January so far of this year. I’ll get into more details later.
If you want to check out my overall portfolio on M1 finance and follow along with my investments, check it out here: https://m1.finance/awNd6cXLSiWt
REIT Overview:
First let me describe what a REIT is. REIT stands for “Real Estate Investment Trust. A real estate investment trust is a company that owns, operates, or finances income-generating real estate. Essentially, buying REITs is a way to access income from the Real Estate space without actually having to own properties. REITs tend to have higher dividends because the rent that these properties generate are repaid to shareholders in the form of dividends. By law, to qualify as a valid security, REITs are required to return more than 90% of their net earnings to shareholders as dividends. This is a pretty good deal for the investors in REITs.
I decided to dedicate 15% of my portfolio to REITs for a few reasons. One reason, the timing of my investment in November of 2020 was a great time to invest in REITs in my view. There was still uncertainty in the overall real estate space given the lack of traffic in downtown urban areas, and the REIT securities had a long way to go still to get back to pre-March 2020 levels before the coronavirus.
Also, because these REITs are in my Roth IRA, the dividends that they give my portfolio grow tax free, which they wouldn’t if they were in a taxable brokerage account. These securities are the perfect candidates to have a shot to beat both the overall returns of the S&P 500 as well as returning a higher dividend than the market. Because that is the goal of my portfolio, I saw this slice of my portfolio as a great choice.
REIT Holdings:
Below, you will find the eight securities in the REIT slice of my portfolio. One of the below holdings technically isn’t a REIT, but because it deals in real estate I lumped it in here anyway. The overall dividend yield for this section of my portfolio is 4.55%. I’ve also shared the overall balance of this section of my portfolio below as well.
Check out my REIT pie on M1 if yourself if you’d like to: https://m1.finance/Ph8IyutjFeav
- Store Capital Corp. (STOR) – 25%
- Realty Income Corp. (O) – 15%
- Innovative Industrial Properties Inc. (IIPR) – 10%
- Extra Space Storage (EXR) – 10%
- Ellington Financial Inc. (EFC) – 10%
- Digital Realty Trust Inc. (DLR) – 10%
- Boston Properties Inc. (BXP) – 10%
- Omega Healthcare Investors (OHI) – 10%
Since the start of investing in this pie in early November of 2020, this slice has returned me 17.22% including dividends.
I will continue to invest in REITs and treat them as a solid portion of my overall portfolio. REITs are a great way to invest in stable cash flow and make a bet on the re-opening trade of the economy. If you like this post, please consider sharing with a friend or visit my affiliate page to see my recommendations and earn referral bonuses.
Until next time, happy investing and good luck to you and your portfolio!
Roth and Roll Finance 