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Healthcare REITs: Where Healthcare And Real Estate Intersect


  • Can two profitable sectors, real estate and healthcare, be blended? Will the investment produce good profits?
  • See how Healthcare REITs produce excellent total returns in the long run while giving investors excellent income streams.
  • How do Healthcare REITs stack up against the stock market in performance?
  • What are the risks in this exciting sector of the market?

(Photo credit: istockphoto.com)

By David Lerman & Jodie Warner

Aging is not lost youth but a new stage of opportunity and strength."

- Betty Friedan

On September 14th 1960, President Dwight D. Eisenhower signed legislation that created a new approach to income producing real estate investment - a manner in which the best attributes of real estate and stock-based investment are combined. REITs for the first time, brought the benefits of commercial real estate investment to all investors - benefits that previously had been available only to large financial institutions and to high net worth individuals.

Over time, investors responded to this new opportunity, and more than five decades after their creation, stock-exchange-listed U.S. REITs have grown to a trillion-dollar equity market capitalization. REITs around the world now regularly provide investors with the opportunity for meaningful dividends, portfolio diversification, valuable liquidity, transparency and market-beating performance.

If I told you that there is an investment class that matches or exceeds the performance of the stock market, pays a dividend double the S&P 500, reduces risk, is non-correlated to the stock market, is remarkably stable in the long run and is ground zero (excuse the pun) for the healthcare field, you’d likely respond with considerable skepticism. Before dismissing me, read on.

Real Estate Investment Trusts or REITs have been trading for quite some time now and have become more popular as time goes by. Most investors are cognizant of the three major asset classes in investing: stocks, bonds, and cash. There are actually several other asset classes but the 4th major asset class is generally agreed to be real estate. The vast majority of investors have been indoctrinated with the thinking that over the long run, stocks outperform bonds and cash and most other asset classes. While this may be true during some time frames, the long run returns

This article was written by

In Sickness and Wealth seeks to uncover investments in extraordinary companies at the cutting edge of the $3 trillion health care industry—across all segments including biotechnology, pharmaceutical companies, diagnostics, medical devices, medical services, equipment, instrumentation and several others. It is our desire to provide keen insight into these companies while balancing the potential reward with a frank discussion on risks. We also will search out candidates that have the greatest potential for long term capital growth, attempting to be long term investors, and trying to emulate Warren Buffett whose favorite holding period is “forever.” Many of our holdings have been held for five to seven years, some for much longer.

Analyst’s Disclosure: I am/we are long HCN. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

We are long Welltower and short call options for a covered write.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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