When interest rates go up, investors often have the knee-jerk reaction to sell certain types of stock. The resulting sell-off can be disconcerting if you don’t understand what is happening.
The yield on the 10-year Treasury drives much of the interest rate outlook. Over the last six months, the 10-year yield has moved from 4.25% to 5.25%—a massive move. Here is the six-month yield chart, via Seeking Alpha.
When rates go up, nearly all real estate investment trust (REIT) stocks experience a sell off. An investor with one or two high-yield REITs in their portfolio may wonder if something is wrong with the company.
That is not the case. The broader picture is that REITs almost automatically sell off when rates increase. There may be nothing wrong with the companies or their ability to continue to pay dividends.
When one of these sell-offs happens, I review the company’s recent results to make sure the dividends are secure. Once I confirm that, I let my subscribers know it’s a great time to take advantage of the downturn and buy shares on sale. Lower share prices mean you average down your cost and average up your effective yield.
Milrose Properties (MRP) is one of my favorite REITs to buy on sale. This company operates as a land bank for home builders. A recent—likely false—short seller report has put further pressure on the share price. Here is the six-month chart:
In reality, Milrose has steadily increased its dividend since it was spun out by Lennar (LEN) in early 2025. A growing dividend is a safe dividend. The current yield of 14% makes MRP a steal to add to your portfolio.
My #1 Stock to Own Before the Midterm Elections
November 3rd could be a great night for certain energy stocks while the rest of the market crumbles on election result news. I’ll share with you my #1 pick and why the window could slam shut even before the final votes are counted...
On October 27th I reveal my #1 stock in my new research presentation. Make sure you’re there so you can buy it before the election results come in. Click here to sign up
