2024-12-05 05:47:00 ET
A falling-interest-rate environment is generally a positive catalyst for the stock market. With lower rates from risk-free investments such as CDs, more money rotates into riskier assets like stocks. Plus, lower borrowing costs make people more comfortable with spending money, leading to increased economic activity.
Having said that, there are some areas of the stock market that tend to benefit from falling rates more than others. One in particular is real estate, and it could be a great time to shop for top-notch real estate stocks while the Federal Reserve is still in the early stages of its rate-cutting cycle. Realty Income (NYSE: O) is one of the highest-quality real estate investment trusts , or REITs, in the market and is trading for a significant discount to its peak. Here's why this 5.6%-yielding, monthly dividend stock could be a smart one to put on your radar right as we approach the end of 2024.
Realty Income owns about 15,500 properties in the United States and Europe. About 80% of its rental income is from retail tenants, but don't let that scare you away. The vast majority of the company's retail tenants are in businesses that are recession-resistant, immune to e-commerce disruption, or both.
