REIT's

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REIT's

Post  Fred on Thu Aug 12, 2010 3:59 pm

I think REIT's provide relatively stable, solid return investments which could provide some stability and longer term growth to your portfolio. Although they are still subject to certain market volatility, they provide excellent dividends (often monthly), which can be re-invested without paying additional commission fees, as well as offering some additional potential for growth in the REIT value. In my opinion it would not be difficult to get a 20% return on a REIT in one year: 10% in dividend and 10% in share price increase. This surely beats the market and any mutual fund you would likely be invested in.

I like REIT's that give monthly distributions because by re-investing the dividend on a monthly basis you will actually accumulate a return on each subsequent dividend. Depending on the dividend yield this will add nearly an additional percentage point on your total annual return. (i.e. for simplicity sake consider a total annual dividend of 12%, or 1% per month. Since you will receive a dividend of 1% and it is re-invested, then you will receive a 1% dividend on that dividend each month and similarly for each subsequent monthly allocation. Annually you will get 12.7% return (12% + 0.7% dividend re-investment income) and any additional growth in the share price which may have occurred. This can be higher if you choose a higher dividend paying REIT.)

Some that I am watching:
SRQ.UN
D.UN
PIF.UN
AX.UN
ARR.UN

Fred
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Re: REIT's

Post  Fred on Sat Sep 18, 2010 4:20 pm

Out of all the different dividend paying RIET's and Income Trusts out there I decided to pick PIF.UN as part of my stable, solid income portion of my portfolio. It pays an 8% dividend annually and it has room for 10-20% in capital growth.

Fred
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Re: REIT's

Post  Max on Sun Sep 19, 2010 1:14 pm

As long as the dividend is not return of capital, it should be OK. This is the type of investment that should be held in TFSA (and may very well be the reason the introduced the TFSA), once the pending issues regarding taxation of income trusts takes place (I admit I am not all that familiar with it).

Max
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