Inflation — even the modest variety we have today — is death to long-term bond returns. Your semiannual coupon payments do not change in dollar terms over the life of the bond, even as the value of those dollars declines every year. At the Fed’s target 2% inflation rate, your income would effectively shrink by about 22% after 10 years due to the compounding effects of inflation.
The same holds true of other income-paying securities, such as dividend-paying stocks, real estate investment trusts (REITs), and master limited partnerships (MLPs). Current dividend income is an important part of your total return, but the rate at which the company boosts the payout over time will be what determines the sort of lifestyle you’ll be able to afford in retirement. Today, we’re going to take a look at five safe, reliable REITs with a long history of raising their dividends: Realty Income (O), National Retail Properties (NNN), LTC Properties (LTC), Retail Opportunity Investments (ROIC) and Digital Realty Trust (DLR).
Source: InvestorPlace
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Posted by D4L | Saturday, October 11, 2014 | ArticleLinks | 0 comments »________________________________________________________________
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