More Tactical REIT Exposure To Increase Dividend Income

My argument for buying into a REIT selloff is simple: If you think the economy is going to improve, you should own REITs. I believe now is a good time to have more tactical REIT exposure today simply based upon the premise that REIT prices are down but the economy is not. I'm not advocating that investors should take the "labor day plunge" and begin loading up REIT shares. In fact, I warn the "market timers" to "be prepared for increasing volatility, and don't expect REITs to go straight up to new highs like we saw prior to May. Those days are over, at least for a while."

Dividend Growth Over Dividend Yield - One of the most tempting things to new dividend investors are high yielding stocks. Many of the highest yielding stocks are made up of income trusts or companies ready to make a dividend cut, similar to what the banks experienced a few years ago. Instead of focusing only on dividend yield, investors should be looking at dividend growth. A company that continues to increase its dividend by 10% every year with a low yield is much better than investing in an unstable company with a current 10% yield.

Source: Seeking Alpha

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