This “Unique Bank Account” Yields 7%
A couple of weeks ago, one of my employees posted this as his Facebook status:
I’ve made $14.37 in interest from my savings account in 2012… I’m here if you want investment tips. 0.30% interest rate? Might as well just stuff it in the mattress.
The sarcasm wasn’t lost on me.
And to be honest, he’s not alone in his frustration…
In a world where the U.S. 10-year Treasury is yielding record lows near 1.4% with predictions of it going to 1%, putting money in the bank is a losing proposition.
But there are places — safe places — where you can earn five to ten times what you’re getting from a 10-year Treasury and 20x more what you’re getting at your bank.
I’m calling it a unique bank account…
Go Where the Bull Is
The old market saying “There’s always a bull market somewhere” is alive and well.
For the past couple months, I’ve been telling you about industries making new 52- week and multi-year highs, like biotechnology, energy, and housing. I’ve also told you about specific stocks — Cracker Barrel and Bob Evans — that are making all-time record highs.
In addition to these, there are specific investment vehicles that are exploding to the upside — like master limited partnerships (MLPs), trusts, and REITs.
To satisfy investor appetite and reminiscent of the dot-com craze, 15 oil & gas companies have filed with the SEC to spin off assets into publicly-traded MLPs in the past year.
MLPs, trusts, and REITs have become hot investment vehicles because they offer investors consistent and steady income.
In my monthly investment letter, The Wealth Advisory, we’ve covered these investments thoroughly and profitably. In fact, our REITs (Real Estate Investment Trust) have been some of our biggest winners.
An REIT is a tax designation given to a company by the IRS. These companies invest in real estate of any kind — from retail space like malls or big box chains to apartment complexes, amusement parks, hospitals, and retirement communities.
The big benefit REITs offer is that they are required by law to distribute 90% of taxable income to its shareholders.
That’s why the quarterly dividends from REITs are some of the highest the market has to offer.
Take Omega Healthcare Investors (NYSE: OHI), for instance…
Omega Healthcare is an REIT investing in and providing financing to the long-term care industry.
Omega owns or holds mortgages on 428 skilled nursing facilities, assisted living facilities, and other specialty hospitals with approximately 49,966 licensed beds.
As I’ve outlined in previous Wealth Daily articles, health care is in a long-term bull market because of America’s growing aging population.
And that’s why we’ve positioned our Wealth Advisory members in OHI.
We recommended Omega Healthcare Investors in 2008.
Our average capital gain in OHI is 76%.
As I write this, OHI is sitting at a near 52-week and an all-time high:
But it gets better…
You see, every three months, we’re getting a check in the mail from Omega Healthcare. It’s paying us a fat 7% dividend.
Think about that for a minute: 7% versus 0.30%.
And Omega Healthcare has consistently raised its dividend…
In 2004, OHI was paying a $0.17 dividend per share. Today OHI is paying $0.42 a share! And it hasn’t missed a payment during this period.
This is the beauty of owning REITs: Not only are we making a lot of money in capital appreciation (the stock is going higher), but we’re also making consistent income with Omega’s dividends.
I love it… and so should you.
–Brian HicksSource: Wealth Daily
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