Why now is the time to invest in REITs

REITs are a great way to mitigate risk during periods of rising inflation.

The S&P 500 index has dropped a whopping 13% so far this year, but the S&P 500 Real Estate sector is only down 3%. In periods of corrections, investors look toward assets with a margin of safety, which often manifests in the form of solid cash flow and conservative leverage.

“REITs can benefit from price increases for rents and from higher real estate values during hotter inflationary periods.” wrote Sam Stovall, chief equity strategist at CFRA Research. Investors see inflation everyday when they’re at the market, the gas pump, or buying a car. Holding onto real assets helps mitigate these detrimental effects whenever inflationary bouts occur.

Read more about how REITs and real estate are a natural inflation hedge.