What Happens To REITs In a Recession?๐Ÿ˜ฑ (REIT Dividend Investing)


good morning Internet! thank you so much
for joining me I know it takes time out of your day to be here in this video I
want to talk with you guys about what might happen to our REITs or real estate
investment trusts if the market crashes in our face as you guys know I’ve made a
few videos on wreaths now on the channel and I’ve been getting a lot of comments
basically stating that if I’m investing in recited this moment in 2019 that I’m
a complete idiot because the market is about to crash in my face and I’m gonna
lose all of my money is anybody else getting this is that the housing markets
gonna crash on you the stock market’s in a crash and you the bond markets gonna
crash on you well let’s address that let’s see if these people if it makes
sense if their statements make sense and how we might play the situation if that
is the case in this video I have six different examples that I’ve pulled of
REITs some most of them are individual stocks and I’ve pulled one ETF that
we’re gonna look at we’re gonna see what did happen to these things back in oh
wait which was the subprime mortgage crash
which primarily affected real estate in the stock market and let’s see what
happened to these things since then and where we stand today if you’re new to
the channel my name is Mike the CPA and welcome to money in life TV where we
teach finances investing and taxes if you guys like the work I do here on this
channel and the videos I produce you can support the channel simply by dropping a
like leaving a comment below and consider sharing this video with others
thank you so much let’s dive into it the first street I want to look at with you
guys is epr properties which is one of the rates I own in fact many of the
rates we’re looking at today are ones of my port fellow so I was curious of what
would happen to some of my REITs if the market crashed here pretty soon so let’s
start with the dividends and let me zoom in and hopefully you guys can see this I
wanted to see what happened to the dividend history of these companies did
the income to keep rolling in so this e PR has been around since 1997 I’m gonna
scroll down here to 2008 roughly and you see where this green is right here that
was the highest amount of paid before the crash hit and around the
time the crash hit during the o8 subprime mortgage crisis if we scroll
down here what I noticed that is unique to EPR is they’re able to keep paying
dividends out well into the future even after the market started to recover the
market started to recover in 2010 or 2009 somewhere in 2010 is when the
market started to bounce back since 2013 their dividends have been rising back in
value slowly but surely each year as you can
see as I scroll down here all the way to 2019 where they’re now paying but about
37 cents per share but what happened price-wise let’s look at the price
action and the charts which I’ve included all of this information just so
you guys know you can look all this stuff up for yourself it’s on Yahoo
Finance that’s where I pull most of my information from for my videos not all
but most of it let me scroll let me zoom in at the peak which I think was 2007
roughly this 2007-2008 this thing was sitting at about $68 per share and after
the crash hit it fell all the way to about $15 per share an 81 percent drop
in value ouch talk about your punch in the face quick note here as we’re looking at
these guys just know that past performance does not always dictate
feature performance but I think history can repeat itself in a very similar
fashion which is why we’re looking at this and how your rates and your
portfolio might behave whether they’re these rates are different rates at least
you’ll have an idea of what to expect so that you don’t have a panic attack if
you see your investments drop in value we we just saw that this investment fell
81 percent but what happened over the last 10 years this thing if you would
have got in if you would have started buying back in around $15 per share even
right here which is around $20 per share look what this thing has done over the
past 10 years it is back up at $77 per share which is how much of an increase
you would have quadrupled your money since 2008-2009
roughly average annual return not including the dividend just from price
appreciation is 38% that’s average annual return pretty impressive you ask
me throw the dividend on top of there you
guys are looking at what 40 something percent return every year not bad can
you guys live with a 40 percent return I sure can
do I care if this thing fell this much in value not really as long as I have
money in other places I can hold on I’ll be fine and that’s why in my last video
I just produced on talking about protecting yourself a recession I talked
about some of the strategies I use to not only protect our wealth but to also
then take advantage of future opportunities that come into play after
a recession the next retour looking at is the Realty
income trust if I’m saying that right yeah a Realty income corporation I
should say that’s what it’s called ticker symbol is oh and this is one of
the most popular REITs in the market today and it’s been around for a really
long time it’s been around guys since 1994 many of the viewers on this channel
weren’t very old when this thing started paying dividends and what’s unique about
Oh are the Realty income corporation is you’ll notice that since 1994 they have
had consecutive annual dividend increases I think for like 26 years 27
years something like that but you could just scroll down here and
look at the dividend history guys it is really impressive to me this means
regardless of the market conditions now if we remember the tech bubble hit in
2000 right that’s when the tech crash happened did this did your income stop
if you own this know your income kept coming in now your value and your shares
might have dropped but your income still coming in at least your dividend income
and since then let’s go to 2008 what happened to this thing during the
subprime mortgage crisis did they drop their dividends no they’ve always been
really conservative with their payouts therefore they were able to keep
increasing their dividends even through a major crash which is really impressive
and even today if we keep going notice how the dividend just keeps increasing
and of 2019 we’re sitting at 22 cents per
share very impressive I’m very impressed with
Realty income corporation how have they done price wise okay in 2008 this thing
was sitting at roughly $28 per share give or take
that was the high before the crash so I went from 28 dollars a share down to $15
a share which really is not a bad drop we just looked at EP R how much I’ve
dropped it have guys 81% not the real of the income corporation I think it’s
because they’re more conservative with their finances and they’ve done a much
better job managing the company 46 percent drop not bad considering some of
the other reefs were about to look at since then this thing has gone up from
$15 a share all the way up to $78 per share in 2019 of where we’re at today
that is a 420 percent increase in value since the over the last 11 years once
again that is an average annual return of roughly 38 percent so so far we’ve
looked at two REITs and the average annual return on both of them has been
38% throw the dividends on top of that we’re looking at 40% return per year is
your guys stress going down now looking at these things I mean as long as you’re
holding on to these things and investing more you’re doing fantastic the next
company we’re looking at is crown castle International Corporation now I don’t
have i couldn’t access the complete dividend history on this one guys I only
have dividend history since 2014 as you can see but at what you can see is since
2014 they continue to do what what do you guys they keep paying us more and
more and more to be a shareholder of their reap or their real estate
investment trusts I’m happy with that what happened to this thing in 2008 so
in 2008 this thing was sitting at roughly if i zoom in I’m thinking that
this was about 48 bucks in dollars in value in 2008 and then it failed to this
point so it fell from 48 bucks roughly to about I think it was like 14 bucks
let me go down here all right a 20 bucks sorry 20 dogs so it fell from 48 to 20
and the crash at the low price that’s a 58% decrease in value
ouch can we live with that well what happened since then
this thing has had amazing amazing performance since then look at this
since 2009 roughly this thing has gone up five hundred and eighty five percent
in value holy that means guys over the past ten or eleven years you’re getting
an average annual return of 53% every year and this on your money if you would
have got in back in this time period and when did this the market really start to
rebound guys let’s just take a moment to look at that well as we can see the high
and Oh 8 was right here right and the low was right here it’ll at this point
at this price level we’re now matching the high of Oh 8 right and this is where
the breakout starts to occurs right here so since 2011 since 2012 the market
started pushing back up it really broke out to new highs at that point until
then so it took from 2009 to 2012 roughly to start to break new highs but
the market started going back up though sometime in 2009 all right this is
another realize it’s the nhi it’s the national health investors corporation
basically what they do is they own senior living facilities and different
health care facilities around the country and basically senior living like
said Senior Living retirement kind of homes stuff like that that’s what they
owned by the way guys if you want to learn more about the companies we’re
discussing in today’s video I’ll link the last video I did on the REITs I own
I own seven different rates currently in my portfolio and I go over the quick
background in the history of many of these rates in that previous video I’m
gonna link that in the description and the comments section below if you guys
want to check that out ok this thing has been around since 1991 so let me zoom in
on the dividend history here so you guys can see this and if we scroll down to
2008 notice that that’s maximum dividend payout before it started to drop was 69
or 69 cents per share after the crash they lowered their
payout a little bit but notice now we’re talking about health care here ladies
and gentlemen health care do you think your health cares whether the markets
going up or down no your health doesn’t care you think they’re gonna shut down
Senior Living facilities and hospitals and things like that if the market goes
down no they can’t they have to keep these buildings operational it’s part of
the public health public safety and all these things we have to keep these
things going they’re gonna find a way to keep these services in place so people
can get their health care provided right what’s impressive about nhi that really
impressed me looking back at the history the dividend payout history of this for
each share or you know each time they’ve paid a dividend is they’ve kept they
were able to keep increasing it and tell about 2013 they had a small blip but
look it over although do you guys notice that the trends going up I certainly do
look at this 77 cents per share in 2015 they’re paying the 85 cents and as of
2019 they’re paying a dollar and five cents per share not bad let’s look at
that cheer price guys and I’m going to you guys can see the graph here in 2018
the high was around $36 per share right here it fell to a low of about $20 per
share in a 809 sorry $18 per share when I looked closer at the graph when I was
doing the research 50% decrease in value 50% drop but since then now it hasn’t
had the explosive performance as the other REITs did but even even so even so
guys since 2009-2010 if you would have got back in at that point around this
$18.00 mark $20.00 mark 300 average or 300% return almost three hundred fifty
percent return over the past in total over the past ten eleven years which is
about 30 percent return per year there divin the payout so like five or six
percent their yield is so you’re looking at a thirty six percent average annual
return if you include the dividend now let’s look at the lr and I just want to
know real quick guys do you know do you get this a lot
some now my family understands that I like investing and they’re actually
really positive about it they think I’m smart for doing it they think I’m smart
for what I’m doing on you too they think they think my overall plan
this is secure and sound and they see that I have a I’m going somewhere that’s
that’s what my family sees but I’ve also encountered just in the general public
if you’re talking to somebody about investing I’ve also encountered the
other experience and I don’t know if you guys runs this sometimes but if you’re
mention that you’re investing you have anybody just snap at you just like oh
you’re it you’re a fool you’re gonna lose all your money that’s
you know that’s a con man’s game this and that now could these investments
drop in value any investment we own absolutely it could happen and you know
I’ve had people in the past if something drops even like in 2014 I think it was
when the market took a steep drop and even an 18 when the market took a steep
drop towards the end of the year people were like ah I told you Mike not to
invest your you’re a fool for investing base that basically that’s how they came
across to me but when you look back at history and you see where things can go
and you see it and you’re like okay well do I have my ducks in a row and can I
pay my death so I’ve cashed them it yes I’ve all my investments or my
investments secured do I need the money from these investments no well then I
can ride this thing out right I can write it out and if I know how to use
inverse Heath yes I know how to use other other types of investments in my
portfolio I can actually make money while the markets going down so I don’t
know I just wanted to mention that because I think if you talk to people
about investing you’re gonna get a lot of criticism especially with real
estates and they’re saying how everything’s inflated right now which I
think it is I think this will eventually come down not saying it will I don’t
know for sure but just something to look out for let’s talk about DLR real quick
DLR has been around since 2004 or at least that’s when they started paying
dividends if now they own technology right they rent out cloud accounting
servers and networks and things like that in 2018 they were paying roughly 31
cents per share then did their business now like I said they’re more of a
commercial kind of company and serving businesses did they have to decrease
their dividend no they did not and look at since 2008 they’ve been able to keep
increasing their dividend every single year – now with the dollar 8 per share
so the point of all this guys as I’m showing you these different investments
is to just show you that yes a market crash can greatly impact the stock price
the share price of these investments but it doesn’t mean your income is gonna dry
up your income is gonna keep coming in and boy oh boy if the market crashes I
am ready to buy oh-ho I am ready folks and I hope you
are too get yourself in that position because I would love to buy to get a
return of like thirty percent per year that would be fantastic right
in 2008 the high on this was $50 per share okay and it fell to $20 per share
60% drop ouch but if you would have held on and if you
would have started adding more to your position at that point guess what you
since 2009 to now you would have made a five hundred and fifty percent return on
your money which is roughly 50 percent per year throw the dividend on there
which is like three percent annual yield you’re looking at fifty three percent
average annual return whew good stuff guys good stuff and the last one because
I know a lot of you guys out there who like investing it like doing it through
ETFs now I enjoy doing a mix of ETFs and individual stocks as you can see with my
rates I like owning them individually but you know as often though this ETF it
does pretty darn well guys so look at vnq and fidelity has a real estate
investment trust index fund as well that you might consider looking at all right
so what’s interesting about vnq which owns I think like 200 different REITs
within its portfolio because they have good companies in there and bad
companies your well diversified but your dividends are kind of gonna be all over
the place because they have good and bad and average companies right it’s all
Mick but ‘old in there and so you got an overall feel for that real estate market
in that sector what you’re gonna see here with the dividend payout is it’s
kind of been all over the place its highest payout going back in time was in
2006 one dollar and four and 49 cents per share roughly after 2008 the one
those REITs took a dive the dividend took a dive as well so
what kind of all the different companies this thing holds but notice the dividend
went to $37 30 cents per share and since then it’s kind of been sporadic since
that time period now even even since 2013 2015 it’s kind of all over the
place so you’re getting ups and downs highs and lows the average of all this
if I just highlight all this it looks like their average dividend payout in
over the history is 72 cents per share about 72 cents looking at its history
since 2004 now many of you think because you’re in an ETF that your investment
safe and sound because you’re well diversified what you’re gonna see though
is if you’re concentrated all in one sector like this thing is it can go down
just like an individual stock and let me show you how let me show you how that
works so look at this thing back in 2008 that was the high the high was $64 per
share and this puppy fell all the way to roughly I think it’s about 18 yeah
$18.00 per share roughly 72 percent drop in value 72 percent even in an ETF guys
it can still fall like a rock I don’t want you to ever have the impression
that it can’t even even though it owns a lot of different stocks if all the
market goes down these things go down with it but as you can see guys since
the last recession this thing has gone up 400% in value you’re getting an
average annual return of 37 percent throwing the dividend yield on top of
that you’re about a 40 percent average annual return every single year since
2009 it’s been doing great I highly recommend V&Q I think in 2019 or in this
year I think it’s up like close to 30 percent it’s like 25 percent 30 percent
maybe maybe I said let me know in the comments but it’s up there it’s up there
so if you’ve owned this you’re doing well and congratulations we just looked
at six different investments we looked at one ATF vanguards vnq the real estate
index fund and then we looked at five other wreaths that are popular out there
that a lot of different people own including myself now let’s look at the
summary page if you were investing if you’ve held on to these things you
didn’t sell off during the crash and you just keep kept adding to Europe
addition over time kept adding more and more shares how would you have done
let’s look at the summary in summary when we look at that history the average
share price drop of these six investments during the 2008 crash was 61
percent now that sounds horrible right that sounds horrible but knowing the
history of where these went after the crash do you think you guys can stomach
a 60% drop I sure can I mean I’m young enough to take the risk
now if you’re near retirement you might not be able to you might want to sell
off some of those shares or maybe move parked move some of your money out of
equities into something else but if you want to ride it out your income would
have kept coming in would there be some volatility in your dividend payouts a
little bits a little bit but as you can as you saw most of the dividends that we
saw went up in value or didn’t go down very much even after the crash if you
had a diversified portfolio your income just kept coming in and if you added
more to that you just did better and better and better so the average annual
return for these sex investments since 2009 and when the market slowly started
coming back now remember the market broke a new high and started becoming
bullish in 2012 sometime in 12 you would have made 38 percent per year on average
every year if you would have bought in at that point not bad at all that means
if you had 10,000 dollars invested your money basically just turned in to close
to 40,000 if you invested a hundred thousand
I would love to do if the market crashes then you basically quadrupled your money
your 100 grand just became 400 thousand as you guys can see there’s a lot of
potential here and I wanted to just cover this stuff with you guys because
there was a lot of heat I was taken to the comments saying basically saying
like you’re an idiot this is gonna crash in your face you’re gonna lose all your
money blah blah blah blah blah yes well my
investment go down like a rock yes I’m fine with it I’m not sweating it as
long as the company as long as a long-term investor do I care so much
about the price movement of this no because what I’m
investing in her REITs I’m investing for income I’m not necessarily investing for
growth it’s nice to have growth and as you guys can clearly see here we get
growth from these things as well but I’m not trying to trade them like a stock
I’m as a long-term investor this part of my portfolio I’m looking for income and
the income I’ve it’s been proven keeps coming so I’m not worried about a major
drop in the market and if it does drop like I said I’m going to definitely add
more and participate in buy more average now my customer shares
I’m gonna try to figure out when this markets gonna level out if it does crash
and then take advantage it from there am i saying the mark is gonna crash no do I
know for sure it’s gonna crash no but I just wanted to show you the history of
these things guys and how much opportunity you have if you’re ready for
it if a crash does comes also to not panic if something like this happens all
right guys well that is all the information I have for you in today’s
video I hope you got a lot out of it and I hope you this gives you perspective of
where we might be going and how much you could benefit from a crash if it does
come either way I’m still gonna be investing for the long term and
utilizing some other strategies as well than I’m currently learning
all right guys with that being said if you like today’s video make sure to let
me know by dropping a like in the comments below guys let me know how does
this impact your overall perspective on Reese now that we’ve gone over this do
you are you worried now about losing 60 percent in value do you like him even
more now seeing how they performed after the crash you know what’s your thoughts
I would love to hear those in the comment section down below also let me
know if people call you an idiot for investing in these things knowing how
high real estate is I get comments like that all the time so I’m really curious
about what you’re experiencing out there in your perspective with that being said
thank you so much once again guys for spending time with me here on the
channel it means the world to me you guys are family to me and I just really
appreciate you being here if you’re new to money in life TV make sure to
subscribe for weekly videos on finances investing and taxes have a great week
everybody use this information to live your life on Kage and I will see you all
in the Nick video piece guys love y’all you

83 Replies to “What Happens To REITs In a Recession?๐Ÿ˜ฑ (REIT Dividend Investing)

  1. Time stamps so you can jump to any point in the video!

    2:00 EPR

    5:15 Realty Income Trust (O)

    7:58 Crown Castle (CCI)

    10:12 National Health Investors (NHI)

    13:00 Digital Realty Corporation (DLR)

    16:30 Vanguards Real Estate ETF (VNQ)

    20:05 Summary Findings of REITS vs Recession

  2. Video that goes into detail of what REITs I own: https://youtu.be/WorXa5vP_TY

    These are 7 REITs I currently own. I will likely continue to add to these positions in the future, and continue to diversify my REIT portfolio in the future.

    Link to spreadsheet can be found here: https://www.dropbox.com/s/s6t7ilyhbb1o9s7/Reits.xlsx?dl=0

    Other REIT oriented videos you may enjoy.

    Dividend Income vs Rental Income: https://youtu.be/F0A1w9TvOEU

    REIT dividend investing fully explained: https://youtu.be/KHjnwGL3ZBg

    Our complete investing library can be found here:

    Stock Market Investing: https://goo.gl/hi2kK4

    Dividend Investing Playlist: https://goo.gl/njSrk2

    Other important videos:

    How To Buy Dividend Stocks: https://youtu.be/isDiBoFxH-g

    Roth IRA Rules Explained: https://youtu.be/3MzZfRrgEYg

    How Rich Can A Roth IRA Make You: https://youtu.be/2nx0vHGNVmE

  3. Killing it with 30k subs my man! I saw that REITs did very well this year so far. Obviously that last recession was rough but that Dot com bubble didnโ€™t effect real estate as much. Like the diversification ๐Ÿ˜‰

  4. What's up internet! I had so much fun making this video. I nerded out when studying how these REITs performed during the 2008 crash. Hope you all enjoy it. I Thank you continuing to Like/comment and sharing these videos I appreciate it more than you know. I would love to hear your thoughts around how you plan to manage your REITs if you feel we are close to a recession.

  5. I love real estate, the actual brick and mortar and REITs. Thanks for sharing this Mike! ๐Ÿ‘

    I'm ready to buy more REITs at the next crash when they're on sale.

  6. The scare during the REIT crisis was based on the fact that many REITs have leveraged position.

    Much like many people buy a paying a down payment and a mortgage, REITs do the same thing in

    a much bigger scale. If for example, the REIT has a 30% equity and 70% of borrowed money for

    their overall portfolio of real estate, it only takes a 30% decline in those real estate to

    wipe out the equity in the portfolio. Recall that during the real estate crisis, many people

    were losing jobs thus were unable to continue their payment. The banks can demand immediate

    payment in full and no other bank will extend the loan so essentially, the person loses their

    house in such situation.

    For REITs, the same thing can happen. The economy wasn't doing well so if the REIT specialize

    in shopping malls for example and the businesses that rent a space in the mall goes bankrupt or

    leaves the mall because they cannot generate enough cash flow to pay their rent, the vacancy may

    not be filled for many years. Eventually, the cash flow for the REIT is not enough to make the

    payments to the bank. The banks may anticipate this earlier realizing that the REIT may be

    borrowing from multiple sources and do not wish to be holding the bag. The banks that loaned

    money can start demanding repayment immediately and since REITs must payout 90% of its annual

    taxable income each year, they may have to sell their properties at depressed prices in order

    to pay off the loan to the banks which demand payment. Selling property depresses the value

    further thus in actual practice, the equity might be negative which if enough banks demand

    immediate repayment, the REIT itself can easily go bankrupt. This is the reason why many

    of those REITs decline so much during that crisis. Fortunately, we recovered from that

    without having a large scale bankruptcy of REITs but someday, we may not be that lucky.

    Mitigating such risk is to reduce exposure to leverage. One approach is to limit REIT

    exposure in general and the other is to only invest in REITs which do not borrow so much money.

  7. I ignore the noise from CNBC etc. I just keep on investing. Good video! ๐Ÿ˜‰ I have the Fidelity REITS index fund as a part of my portfolio. You really don't lose money until you sell during a ๐Ÿ‘‡ downturn. Invest for the long term is key!!!

  8. No one wants to wait 10 years to โ€œbreak evenโ€ again. Very little upside, all kinds of downside… When Trump leaves the WH, it will be 2008 all over.

  9. You can't consistently time the market, or we would have trillionaire's (or what comes after that?). I've found that simply consistently investing in quality companies (or ETFs, if you want less risk and an easier investment strategy) over the long run (especially when everything crashes) will make you wealthy. I chose quality dividend companies (but lots of investing strategies work). If you feel you are at the top of a cycle, you could consider your asset allocation, but I've rarely seen people predict the top (or bottom).

  10. Wasn't even born when Realty start paying dividends but Realty is one my favourite monthly dividends stocks <3

  11. Yeah, my parents say the stock market is the same as a casino where the rich control and make money off of you and that a normal person will never make a dime of profit ๐Ÿคฃ

  12. Thanks so much for addressing this topic. I have been waiting for someone to speak on this. Keep up the great work!! Keep on NERDing!!!

  13. I like the video, but I think youre missing the point….. No one is afraid of buying into stocks at the exact bottom of the market…. You should have showed what the average annual return was if a person had bought a REIT at the exact top of the market before the crash, and showed everyone how even those "unlucky" people got good returns when including dividends

  14. I am your like #78 because I liked your video, but I loved your description's video. nice way to separate each part of the video.

  15. The assumption is you keep on consistently reinvesting. But what if you retired before the crash and were using all the dividends to live off of? I think your monthly income would have severely been cut as the example of EPR shows. Seems like it's better to invest in dividend growers and aristocrats/achievers to make sure your income decreases as little as possible. "O" would have been good since the dividend never got cut.

  16. I would love to buy realty income but it's over priced in my opinion. If it drops due to a crash or recession I will buy buy buy

  17. I just started investing this this year and have never been in a recession with holding any shares so I'm excited to see what happens. (Get discounted companies hopefully ๐Ÿ˜)

  18. Great info! I was worried about it, but I am at this point more wondering if I should wait to buy, maybe getting a better deal on the stock, but not sure. I think it all depends on your ability to wait it out, if something does happen.

  19. Great job on the video. Please note that it may have been easier to visually follow if you made the column have the same number of digits to the right of the decimal. Highlight column and click the increase digits button. Also conditional formating with one color (light to darker shade) would have made things stike out. HTH

  20. I also hold a fair size portion of VGSLX (the index fund version of VNQ) . Starting to add some single REITS now.

  21. I started my first 401k in 2008. I was 18. Men at my job said I was nuts, my dad made me defer 20% of my pay check. Nuff said

  22. I like it when people get mad bc im investing…i then say excuse me whats your retirement plan lmao the days of workin 30 yrs for a gold watch & pension are done….so how long are you going to be workin for again ๐Ÿ˜‚๐Ÿ˜‚๐Ÿ˜‚

  23. Recessions are good for acquiring more shares at a lower price. Hoard some cash for this purpose. More shares = more income = more shares = more income… etc. ๐Ÿ™‚ Keep stacking shares! When you buy dividend companies, you are buying income. Just try to get as many shares as you can for the best price. rinse and repeat…

  24. You asked a good question regarding people getting angry when it comes to investing going down.

    What it really comes down to is thisโ€ฆ Not will an investment go up or down, but what is a better investment in the long run? And here are your two options (as it pertains to real estate investment trusts):

    1. A portfolio of real estate that produces income that increases over time with inflation, and is managed properly so as to have a high occupancy rate or

    2. Pieces of paper that do not produce income and, by definition, decrease over time with inflation as its supply is limitless โ€“ a.k.a. cash

    Which of these two would you rather invest in? That's a better question to ask because that's really what it comes down to. When you see cash as a stupid investment, it takes the fear out of the game in the long run.

  25. Buying the ETF in this instance doesn't make sense. Each of these companies alone are already well diversified (although diversification for its own sake is nonsense). You will be better to just cherry pick the individual companies you mentioned that never cut their dividend and start there. The problem with an ETF is that they have a good AND THE BAD. They have the underpriced AND THE OVERPRICED. If you have no analysis skills, then ETF makes sense. But if you have the ability to analyze things like you just did, then ETF is absolutely stupid. Find the good companies and buy them at a good price.

  26. Yes, unlike you I have no plans for holding reits for a 61% loss. And "you" can't have it both ways staying fully invested and plan to load up after a crash to do the thing most people dream of doing but few manage to do it. I vow to do it during the next recession and start scaling in at -20%, -30%, and even borrow money and sell my house if the market is down 60 or 80%. Bring it on….lol

  27. The compounded average return of EPR going from $15 to $77.68 is around 15% a year over 11 years. Compounded returns is what people generally use for comparing investments. If the viewers are expecting a 38.18% return per year they are going to be very disappointed. There is a 10 year period where the reit goes nowhere so you collect dividends at around 6%. Assuming they are a stable reit and it won't go bankrupt in a downturn that isn't bad.

  28. I appreciate your analysis, but I think you could improve its value to subscribers by… Not calculating the absolute best return anyone could have gotten (perfectly nailing the bottom), and instead compare different (more realistic) situations like Dollar Cost Averaging throughout a crash (and how long would the appreciation + dividends take to break even). The way you described it is technically accurate, but who actually got those returns with the bulk of their money using perfect timing?

  29. Nicely explained with the data. Mike do you also use Z score of stocks. What other parameters you use other than you explained in your video to determine stock is well worth investing or not? Can you also throw videos on other asset classes like inverse ETFs? Keep up the good work.

  30. The housing market does seem a bit high , and maybe that means to continue to look but not put 100% percent effort sifting through deals .

    I think following your return on investment numbers is the most important, and that should help you determine if you want to purchase a deal even if the market has elevated prices. I think the hardest part about real estate is not crunching the numbers, but having the persistence to continue looking for deals AND having the patience (disciplined mind) to not act on a bad investment just because it may feel like progress has not been made in a while.

  31. You won't be getting any dividend because you won't own it. I am buy and hold and even I would not stomach an 80 pct drop and neither would anyone else. Which is why I love going back to the charts and looking at which companies dropped the least during that crash. I've come up with 6 growth companies and have only held these 6 stocks in a 1.2M portfolio. The rest of my wealth is in actual real estate. Which I prefer far above reits. Reits are stocks. Plain and simple. They are not real estate at all. And you get taxed up the ass on reit income. I would probably pay around 39 pct on reit income vs 15 pct on my long term gains when I sell my stocks. In fact I think there's a way i can pay ZERO pct taxes on my stock and real estate gains if I sell when I have NO income whatsoever.

  32. I love buying stocks that are undervalued but still doing well…bought alot of apple in late december and early jan when people were hating it and now getting rewarded and loaded up on a canadain energy company in jan as well and now again being rewarded …this is why warren buffett is one of the richest men in the world and why is had loaded up on banks !!!

  33. Awesome job Mike the CPA. Most people invest with their emotions instead of their brains and don't do the research like you do. Yes those people that say those things, they say that because they are clueless. Example: Back in 2008 I had a lot of clients that were scared to dead because of all the fear the media did and other people like you said. I told them not to sell, but some of them that had Brokers had them sell, I thought that wasn't very smart of the Broker, so they sold. One of my friends that I work with I talk her into an Roth IRA about 2 years before and when the shit hit the fan she wanted to sell. I told her this is the time to buy but couldn't convince her. I did manage to keep her from selling though. I felt sorry for the people that so all their retirement.

  34. Great video. I stopped telling people to invest or that I invest altogether. The backlash makes you feel like you've committed a crime.

  35. just because 08 was a crash and affected REITS. it was because there was a housing bubble, That doesnt mean that automatically our next crash will affect housing, it may affect it a little but I think its going to be in another sector

  36. Hi, guy. I'm from Brazil. Great video, and when I see your videos, I get better two things: improve my English and learn about USA investments. Thanks so much.

  37. Hey Mike,

    I have a huge (multi million dollar) abnormal tax issue. I was told to contact a CPA by tax lawyers. Its a crazy tale that is worth a feature length film. Could I get your opinion on if its worth it and if so could i employ you with a lucrative amount and possible videos for your channel.
    Key notes:
    -Grandpa had multiple millions.
    -His new wife stole it when he died.
    -She's dead now
    -My mom's getting its asking her to pay 3 million in missed taxes by the IRS. (The real one not a scam one. Verified by visiting local IRS office.)
    HOWEVER she's not getting any money she's disabled.
    -a company in Texas has her ssn and is using the money.

    WE BELIEVE, she has an inheritance thats being stolen. The IRS says the money is from dividend royalties and rental incomes.

    Message me and we can talk.

    Keith Burns.

  38. Hey Mike! You are one of my top You Tubers. In fact, I think you should branch out to more types of lifestyle VLOGs. I think your fans would like to hear more about other things you are interested in

  39. Mine has sent letters about "Final Distribution" since 2010. Its' value has deflated from $25,000 to $2,500. Gee, what a not so GREIT investment. I'm still waiting for the $2,500. Should I hold my breath? Better luck, people.

  40. If you pay close attention to commercial office and retail REIT's they tend to lead a general market crash by 6-12 months. Most of them fell 50-60% 2007 going into 2008. I don't own many of this type but I bought the other types when they fell 2008-09.

  41. let me tell you this is a very good video. I really like it and I just subscribed. Thanks for the valuable information.

  42. I made the mistake of clicking on a link for Fisher Investments for a "free" publication, something like "10 Common Retirement Mistakes." After being pestered for a few months, I agreed to meet with a Fisher agent to look over my portfolio. I have been investing in individual stocks for over a quarter century. After my share of mistakes, I settled on a Dividend Growth Investment Strategy focusing on dividend-paying stocks (mostly REITs and BDCs). The Fisher agent tried to convince me that my portfolio was all wrong and Fisher could do better. He was very vague about how Fisher would do this. I listened politely, but said, "Not interested."

    I retired from the US Air Force in 2007. I had $105,167.97 in my TSP (federal employee equivalent of a 401(k)). I rolled it over to an E*TRADE account and started investing it in dividend-earning stocks, including my favorite stock, Realty Income. I haven't added a dime to that account, other than to reinvest all dividends, That account was valued at $464,391.28 as of October 31, 2019. I have three E*TRADE accounts, a regular investment account, my rollover IRA and a Roth IRA (to which I contribute the maximum every year), and a collection of five DRIP stocks. The total value of these accounts on January 1, 2008 was $380,280.67. The total value of these accounts as of October 31, 2019 was $1,465,919.20, and they generate $57,258.60 in annual dividends.

    When the suckers were all panic-selling during the Great Recession, I was laughing and buying more shares of dividend-earning stocks at bargain-basement prices.

  43. the obama administration pumped 40 billion a month into mortgage backed securities the entire time he was president so that's why the reits shot back up. You left that part out.

  44. Hi i am from India. Reit's have been recently introduced in India. There is only one listed REIT in India by Embassy REIT. Can you analyze its portfolio and tell whether it is good for investment

  45. Thanks for sharing, but I believe the "average annual return" was calculated incorrectly. Take the EPR example, 420% price increase over 11 years amounts to about 13% per year. Dividing 420% by 11 would get 38%, but that's not the average annual return. At 38% per year, in 11 years, it would have gone up 3,456%. Ending Value = Beginning Value * (1 + Annual Rate) raised to the power of Years.

  46. I generally agree with you, but one thing you didn't mention is how many REIT went bankrupt during the 2008-9 Great Recession. It's great that those which survived recovered nicely, but what about the others? For instance, I expect a LOT of the retail mall REITs will go under in the next recession, even though many of them are currently paying amazing interest rates at the moment….

  47. Sure but you're talking about an unprecedented crash followed by an unprecedented growth period. So comparing anything to that time period is false and will probably not be indicative of the future.

  48. I still dont understand why not sell hold the cash and wait??? Especially whole everything is falling then buy in reinvesting the profits for more shares

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