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Last week, Horseman Capital's Russell Clark said the level of capital flows into the United States may not keep the dollar strong. That's bad news for anyone sitting on cash or seeking ways to generate income from their money.
Clark noted that U.S. Net International Investment Position (NIIP) as a percentage of GDP sits around 50% of the GDP deficit. However, private sector deficits in China and Europe are sitting near zero.
This means almost all of the money coming out of Japan is heading to the United States.
And that is poised to send U.S. bond prices lower. Global investors will stretch every new dollar for income drawn from safe-haven assets.
Of course, these investors are ignoring the best place to obtain a solid dividend, especially in the face of low interest rates, increasing rental payments, and rising real estate prices.
They're called real estate investment trusts (REITs). They've been one of the top-performing assets of the last 20 years thanks in part to the Fed's commitment to low interest rates.
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Today, I'm going to discuss one small-cap REIT that has risen sharply over the last 12 months but still remains under the radar on Wall Street.
It pays more than a 7% annual dividend that you can lock in today and ride through the balance of 2020…
A 7% Dividend REIT with Sharp Upside as Rates Fall
There are several advantages to REITs many investors overlook.
First, they generate gobs of cash from rent and other property income. They also provide distinct tax benefits that are hard to obtain anywhere else.
Third, REITs do not pay corporate income taxes. That means higher levels of cash flow are given to investors.
Combine those benefits with companies that own properties in places where prices are rising, and you have a winning recipe for outperformance…
That brings us to today's small cap REIT. It pays a 7% dividend yield and has a high probability of outperforming the broader market over the next 12 months.
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.