Some questions and comments popped up about REITs since I introduced the table on asset class returns – why did REITs perform so well the last 15 years? Others saw REITs on top eight out of fifteen years and concluded it must be the best investment going forward (despite me pointing out the failings of that conclusion). I thought I’d find the answer.
From ’00 to ’14, REITs blew away other asset classes with a 12.9% annual return. Before you start drooling over that number, remember how REITs work. While you get those juicy returns, you also get the tax consequences.
REITs avoid a big chunk of corporate taxes by paying out most of its income through dividends. In return, REITs have their own tax rules which are passed down to you (dividends are taxed as ordinary income). Continue Reading…
When you invest in funds, knowing the different stock market indexes is key to building a portfolio and tracking its performance. There are two basic reasons why you should know what each index measures: