DGI Newbie

[tsd906]

Hello all, I've been checking out the forum for a few days and now I'm cleared to post. Seems like a very friendly learning environment and I'm eager to listen and learn. 44 years old with an established 401k, but I've always wanted to get involved in DGI. However, "life" just kept getting in the way , until this year when the stock market dropped in Jan/Feb, I figured it was the right time to start, while things seemed cheaper than the last 7 years. I've been reading anything and everything I can get my eyes on about valuation, fundamentals and DGI. 

Thank you for the opportunity to be a part of this forum!

One quick question, I see most of the experienced folks on here have recommended newcomers to DGI to stay away from REITs. Could you please explain the reasoning behind this recommendation? 

Travis

[Kerim]

Welcome to the forum, Travis!

I'm surprised to see that impression about REITs. I think lots of DG'ers are big fans of *some* REITs, and I think you'll see many DG portfolios with some allocation to REITs. From an income perspective, the higher yields are great, if you choose the safer ones (I'm thinking of course of O and similar, like WPC, and some of the healthcare REITS, like OHI, VTR, etc.). You'll probably get a much more negative reaction to lesser quality REITs, and especially the mortgage REITs, which (generally) have much higher yields, but much more risk.

[tsd906]

Thanks Kerim, I thought the same about the REITs you listed. I own some O and I've been thinking about VTR. I just saw some of the welcoming messages to other newcomers here in the "Introduce Yourself" threads, with a sort of "Not for beginners" tone. Maybe just a misperception on my part. My thought process is to build core holdings like ADM, VZ, EMR, CSCO, HP etc., but also kickstart the DRIP process with some decent yielding REITs. (Is my thought process flawed?)

My long term goal is to establish a 4th leg (DGI - passive income source) to my retirement platform (401k, SS, retirement/pension), and short term goal is to learn as I go while building the snowball.

[Roadmap2Retire]

Welcome to the forum.

I think REITs are great investments and can be a big part of the DGI portfolio. I own a few REITs and together they form the largest portion of my current income and they grow that dividend regularly year after year - and in some cases, quarter after quarter.

I own O, OHI and VTR (with a very small position of CCP from the VTR spinoff, but I might sell that soon).

R2R

[DividendGarden]

Welcome to the forum, Travis. I've owned Realty Income (O) for many years and have been satisfied. It might be a bit overvalued at this time, however. I'm not interested in other REITs, but would possibly consider a Vanguard REIT index fund to get some broad REIT exposure.

[tsd906]

10-4, thank you DG.