A slight bump in stock futures is not doing much to change the overall picture of the market right now. A quick look through the current headlines reveals the frequent presence of that dreaded s-word, "stagflation."
It seems pretty certain at this point that we're headed for a slowdown in economic activity coupled with extremely stubborn inflationary pressures. The U.S. Federal Reserve's ability to impact inflation with interest rate hikes is more constrained than it was in the 1970s, and the continuing aftershocks of the pandemic and the Russia-Ukraine war are pushing the global supply chain recovery out longer than anyone wants.
As a result, investors of all stripes are massively shifting their portfolios around, selling off huge quantities of stocks to preserve capital and focus on safer staples that are less vulnerable when we're in bear market territory.
It's not a secret that, over the years, I have learned to love real estate investment trusts. While many investors ignore REITs as they pursue the next big thing, I have learned that it's usually a better business decision to be the landlord of all the candidates for the next big thing and just collect the steady rent payments.
REITs are an ideal asset class for the current market for one main reason: No matter the market, everyone's got to pay their rent. There are almost no market conditions that could seriously threaten a REIT's cash flow, which means your dividends are protected.
Right now, I'm nearly convinced that most investors would be better served by owning REITs and small banks and ignoring everything else.
Today, I want to talk about two REITs that everyone else is ignoring for one reason or another. They are trading at ridiculous valuations and therefore have tremendous upside potential, and both offer high dividend yields in excess of 7%.
Here they are...