The following chart illustrates the average calendar month gain for the NAREIT Equity Price Index since 1971 (its inception).
While the stock market tends to enter its seasonally strong period sometime in October, REITs tend to perform well during the calendar months of December through July.
In addition, many REITs currently have substantial dividend yields.
What's a REIT?
REITs, short for real estate investment trusts, are companies that own and/or finance income-producing real estate.
What do REITs do to make money?
In short, REITs buy real estate and then rent or lease it out. After that, REITs must pay their shareholders a minimum of 90% of their taxable income in the form of dividends.
What are the different types of REITs?
Most REITs would fall under the category of equity REITs which are publicly traded and own or operate income-producing real estate. The remaining categories of REITs are mortgage REITs, public non-listed REITs, and private REITs.
How can I invest in REITs?
Investors can purchase shares of a REIT directly via their stock broker just like any stock. In addition, there are REIT ETFs and mutual funds.