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The U.S. Federal Reserve wraps up its first policy meeting of 2020 today. And markets do not expect the U.S. central bank will raise interest rates this week.
In fact, given the historically low and negative interest rates around the globe, the Fed is more likely to cut interest rates again this year instead of pushing borrowing costs higher.
The International Monetary Fund recently slashed its global growth outlooks for both 2020 and 2021, citing China's worsening economy as the driver of its revisions.
With interest rates low, investors should seek income-generating assets that pay well beyond the 10-year bond and provide price appreciation upside in the process.
And the best possible assets to combine both attributes are real estate investment trusts (REITs).
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You see, REITs allow you to cash in on a company's cash flow generated by properties across various sectors.
REITs provide one significant tax benefit that will enable investors to capture more of the cash flow. And since these investment vehicles distribute at least 90% of their taxable income to shareholders, they are not subject to corporate taxation.
Today, I'm taking a look at two dividends that provide additional upside.
More importantly, they pay investors annual dividends greater than 8% and have reduced downside given their superior positions in their respective real estate sectors.
About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, and consultant with degrees from Northwestern, Johns Hopkins, Purdue, and Indiana University. He is a seasoned financial and political risk analyst, with a focus on stocks, hedge funds, private equity, blockchain, and housing policy. He has conducted risk assessment projects for clients in 27 countries, and consulted on policy and financial operations for some of the nation's largest financial institutions, including a $1.5 trillion credit fund, a $43 billion credit and auto loan giant, as well as two of the largest Wall Street banks by assets under management.
Garrett joined Money Map Press as an economist and researcher in 2011, specializing in alternative strategies with an emphasis on fundamental and technical analysis.
Tags: REITs