Right now, plenty of investors are quaking in their boots, wondering if they should sell their real estate investment trusts (REITs) this month. Why? The first worry has to do with an old adage that just won’t go away. Stop me if you’ve heard it before: “REITs perform poorly when interest rates rise.” Short time frames (especially a single day!) hardly point to a trend. If you take a longer view, you’ll see that REITs actually tend to outperform as rates head higher. Now that it’s flipped to September — historically the worst month for stocks — they think the market’s about to crater. But here’s the problem: the pattern doesn’t always repeat. If you were out of the market in September 2013, for example, you missed out on a 2.6% gain.
REIT Buys the Herd Has Missed: Extra Space Storage, Inc. (EXR): Self-storage is primed for growth as Americans pile up more and more stuff while downsizing their homes and moving into cities. Crown Castle International Corp (CCI) has been largely overlooked in the REIT run-up, too. It’s the largest provider of shared wireless infrastructure in the U.S. Mobile data usage is doubling every two years, and CCI owns cell towers and rents antenna space to carriers, primarily in and around cities. It’s a good place to be a landlord.
Source: InvestorPlace
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