DLTR - Here Is Why I Am Doubling Down On 6% Yielding Realty Income
2024-03-07 13:49:42 ET
Summary
- Since the Fed began raising interest rates in 2022, REITs have faced significant pressure, with valuations dropping to historically low levels.
- Predicting the timing and extent of future interest rate cuts is a daunting task. Yet, it's a matter of time before we see the first rate cut.
- Realty Income, with its superior quality and proven track record, is well-positioned to withstand elevated interest rates and deliver market-beating returns.
- Today presents a great opportunity to buy Realty Income, which is trading well below its historical valuation and intrinsic value.
- While waiting for the recovery, I am being paid a monthly dividend with a dividend yield of 5.89%.
As inflation picked up in 2021, the Fed stepped in with unprecedented rate hikes, which have impacted the valuation of REITs across the board.
Compared to earlier when in 2020 the Fed maintained historically easy monetary policy with interest rates near zero and used significant quantitative easing to support the economy, the reversal in the policy has sent shockwaves across the real estate industry.
The Fed's swift and decisive actions have led to raising the federal funds rate by 525 basis points in just 16 months to effectively fight inflation and avoid erosion of purchasing power....
Here Is Why I Am Doubling Down On 6% Yielding Realty Income