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NRO: Real Estate For Wealth Preservation And Income


  • NRO invests in a portfolio of real estate securities that generate income for investors.
  • The fund appears to be following a contrarian strategy, which has merit but could pose problems if things do not return to normal quickly.
  • Real estate offers an excellent way for investors to protect their wealth against inflation and even grow it.
  • The fund had to cut the distribution earlier this year in response to fairly hefty capital losses that it took in 2020.
  • The fund appears reasonably valued but a better entry point may become available.
  • Looking for a helping hand in the market? Members of Energy Profits in Dividends get exclusive ideas and guidance to navigate any climate. Learn More »

Skyscrapers in La Defense
Photo by Gary Yeowell/DigitalVision via Getty Images

One asset class that every investor should have a degree of exposure to is real estate. This serves two purposes. First, it serves as a store of value in the face of inflation, which may become

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This article was written by

Power Hedge profile picture

Power Hedge has been covering both traditional and renewable energy since 2010. He targets primarily international companies of all sizes that hold a competitive advantage and pay dividends with strong yields.

He is the leader of the investing group Energy Profits in Dividends where he focuses on generating income through energy stocks and CEFs while managing risk through options. He also provides micro and macro-analysis of both domestic and international energy companie. Learn more.

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (16)

NeoContrarian profile picture
The author of this article has created an excellent piece - thank you.

Meanwhile trolls use selective data however the point of a semi-retirement / retirement account is hold for the long-haul & take the inevitable rough and smooth over the last business cycle to the one we are currently in the very early stages of.
O`where....o`where could the Dogs of the Dow Be ' o`where could the safe return be ?

NRO is a burn of investor money ...
Real-Time Retired Guy profile picture
Sold NRO with the latest cut. JRS, RFI and RQI are far superior REIT CEFs.
@Real-Time Retired Guy
All 3 of the funds you quoted have lower yields than NRO.
Power Hedge profile picture
@Real-Time Retired Guy RFI also has an enormous premium.
Real-Time Retired Guy profile picture
@Power Hedge No one buys CEFs at a premium - at least I don't. I was just referring to the quality of the funds.
Good article.

I have invested for several years in NRO & VGSLX: Long.
catsaunders financial profile picture
within REIT portfolio we have AWP, TRREX, TRGRX. looked closely at NRO at the time of the divvy cut. will reevaluate after this outstanding article. I like the healthcare % in this fund, an area we are lacking
scarp1952 profile picture
I’ve owned NRO in the past and done fairly well. The managers can really take you on a ride with distributions though, both up and down. Though I find the entire CEF market presently a bit pricey for new money you might wish to investigate IGR a well managed fund that has kept the dividend stable for several years and grown the share price at least ten years, At least at my buy in since these funds bounce around in price so much.
This has “massively” underperformed VNQ (the underlever levered index) two year, five year, max.
Why do you offer this????????????
catsaunders financial profile picture
@jcmcapital i would guess the low price which attracts people on a budget and cannot afford reet and/or rwo
ChristopherSmith profile picture
@jcmcapital It’s offered for those wanting a higher yield on a monthly basis. Also, 10 year annualized return for NRO is slightly higher than VNQ....
@jcmcapital 8% distribution vs 3.5%, monthly distribution vs quarterly, $4.6 / share vs $96 would be my guess. Yes, the price shouldn't matter but 'i own 1,000 shares of XYZ sounds better than I own 50 shares of XYZ'.
I read this article because I got into ARR a while back. Its div was high and it paid monthly. Div was cut - a lot - and I'm still down 30% from where I bought it.
There are other mREITs out there that will do better and can match the goals stated in this article (not in malls, not in commercial). I'm not in the stock MPW but it seems like doctors & dentists are still going to require an office.
I really like the coverage of the supply of money in this article. I think it's important to see. Unfortunately, no one else seems to care.
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