Everything you need to know about investing in REITs
Navigating Real Estate from an investors perspective
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Happy Monday!
Let’s start the week off strong.
👉 Emergency fund: where should you keep yours?
👉 Market update: tech sector, index performance, projected inflation
👉 REIT breakdown: what are REITs + 3 top performing stocks (premium)
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Weekly Market Update 🗒️💡
Tech
All 11 sectors of the S&P 500 were positive on Friday, with Technology leading the way rising 2.6%.
Microsoft (MSFT) finished at all-time highs on Friday rising 2.5%, while stocks like Apple, Tesla, Meta, and Netflix all grew by more than 2% each. Alphabet saw a 1.8% increase.
Is tech rallying again? Only time will tell.
Indexes
The surge on Friday was enough to lift the 3 major indexes for a 2nd consecutive week of gains.
What recession?
The S&P finished the week 1.3% higher, while the Dow Jones added 0.7%. The Nasdaq led the way rising about 2.4% on the week.
Oil
Oil prices rose slightly on Friday but still down 4% on the week.
Investors grew confident that the Israel-Hamas war would not spread in the near term to disrupt supply, resulting in an oil sell-off.
More supply = lower prices.
However, markets are starting to worry that a global slowdown is near as a result of data out of Europe and China that signaled the conflict may spread, resulting in less supply.
Inflation
The one-year inflation outlook rose to 4.4%, the highest forecast since April. The five-year expectation climbed to 3.2%, matching the highest since June 2008.
A friendly reminder that dividend stocks help combat inflation.
A Total Breakdown of Real Estate Investment Trusts (REITs)
In the world of investing, the journey to financial freedom often begins with the desire to make a lot of money very fast.
For many, the attractiveness of individual stocks like Tesla and Amazon is irresistible.
Everyone wants a stock that goes up 100x. But they don’t come around often.
You need to understand the importance of a patient, strategic, and calculated approach to building wealth.
Especially if you’re seeking to create a reliable source of passive income through dividends.
Let’s talk about a powerful investment vehicle that aligns perfectly with your goal of generating a reliable source of passive income…
Real Estate Investment Trusts, commonly known as REITs.
What are REITs and how are they formed?
A REIT is a unique investment entity that owns, operates, or finances income-generating real estate across various sectors.
These can include industrial spaces, healthcare facilities, data centers, digital infrastructure, and more.
Unlike traditional stocks, REITs provide a straightforward way for investors to access the real estate market without having to physically own properties.
No need to be a landlord. No need to answer calls at 12 AM to fix a toilet. No need to kick tenants out of the building.
But there are certain requirements for becoming a REIT.
To become a REIT, a company must meet specific criteria outlined by tax regulations.
This includes distributing at least 90% of its taxable income to shareholders in the form of dividends, providing a steady income stream for investors like yourself.
These requirements not only ensure regular dividends…
But also create a structure that aligns the interests of investors and the company, promoting stability and growth over time.
However, REITs are influenced by common market trends.
To be successful in REIT investing, it’s crucial to understand the trends in real estate markets.
Shifts in demand for specific property types, changes in interest rates, and evolving economic landscapes can significantly impact the performance of REITs.
For example, the surge in e-commerce has elevated the demand for industrial real estate, and the rising age of baby boomers has increased the demand for retirement home real estate.
To be a successful REIT investor, take a step back and look at the macro economy. Where are we headed? Who will use these buildings? Where is demand going?
Economic factors also leave their mark on REITs.
Factors such as inflation and unemployment play a pivotal role in shaping the real estate market and, consequently, REITs.
By staying informed about these economic indicators…
You can make informed decisions about your REIT investments.
To make things easier for you, here are 3 REITs with BUY ratings that have large potential upsides going into 2024.