REITs or real estate investment trusts are most appropriate for investors looking for a steady income stream and hedging their portfolios against the current inflation and a potential recession. That’s because REITs must pay 90% of their taxable income to shareholders through dividends. Moreover, REITs perform well in an inflationary environment because the value of their properties increases.
The consumer price index increased 9.1% in June from a year ago and surpassed the 8.8% Dow Jones estimate. As a result, traders in the futures market expect the Federal Reserve to raise interest rates by one percentage point at its July 26-27 meeting. Also, Bank of America Global Research, led by Savita Subramanian, cut its year-end price target on the benchmark S&P 500 to 3,600 from 4,500.
