Everyone Knows Amazon But Who Knows STAG?
If you have ever seen an Amazon distribution center, you know it is big. Big is probably the wrong word. Most of them are huge. What most do not realize is that Amazon likes to let someone else handle the real estate. AMZN doesn’t want to be in the real estate business. In fact, many companies don’t want to think about real estate. Wise investors, however, do think about this hard asset. Enter STAG. STAG Industrial, Inc is a powerhouse of real estate and Amazon is one of their customers.
Many Investors’ Biggest Mistake
Far too many investors get nervous at the wrong times. They get nervous when the market is going down, when Covid strikes, and when war is brewing, or hostilities are increasing. They get spooked by inflation, the Fed, interest rates, deflation, stagflation, presidential elections and even by who wins the Super Bowl. They then sell their investments, often at a loss. Then, to add insult to injury, they get back into the market after most of the best gains have been made by the patient, long-term investors.
A Picture is Worth Many Words
The following image from JPMorgan helps understand the opportunities lost by these rash decisions. Note the 2.9% return of the “Average Investor.” Now think about inflation over twenty years. Those investors are hurting unless they are Bill Gates, Warren Buffet, or Jeff Bezos.
Now look at the returns of REITs over the same time period and the return of the S&P 500. Are you surprised? Don’t be surprised. Real estate is an excellent investment. That is why so many buy real estate for various purposes.
The Safe Portfolio Includes Bonds
Now look at the “safe” portfolio recommended by many advisors. The light blue 60/40 is 60% stocks and 40% bonds. At least the blended return is 6.4%. That isn’t great, but it certainly is more than twice the return of the average investor. Now notice the orange 40/60 portfolio mix that is 40% stocks and 60% bonds. The twenty-year return is 5.9%. That isn’t bad, but it really isn’t good either. I cannot in good conscience recommend bonds for younger investors. So, if you are 65 years old or younger, give serious thought to avoiding bonds. If you are 65 or older, you should have made good decisions during your 40 plus years of working that would make bond ownership unnecessary.
My Recommendation
For most investors, good dividend growth ETFs like VYM, SCHD, and DGRO are the best long-term strategy. Of course, this is just my opinion. If you have more than $250K in assets, then you should consider diversifying into some good REITS. One such good investment is STAG.
STAG – A REIT Business Profile
STAG Industrial, Inc. (NYSE: STAG) is a real estate investment trust focused on the acquisition and operation of single-tenant, industrial properties throughout the United States. By targeting this type of property, STAG has developed an investment strategy that helps investors find a powerful balance of income plus growth.
Full Disclosure
Cindie and I own 1,300 shares of STAG as a long-term investment.
LINK: STAG
Let me encourage you to look at the complete investor presentation on the STAG website: LINK
Know Your Flocks & Herds 
How do you compare STAG to DRE and FR? the last two have higher rating and better dividend pay?
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Good question. I added a comment to the post. All three have interesting characteristics, but I like STAG slightly better than DRE and FR. My reasons are on my comment on this post. Thanks for asking.
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There are certainly some good reasons to like DRE and FR. I prefer STAG for a couple of reasons: a monthly dividend and a better yield. The QUANT rating on all three is HOLD at the present time. STAG has better revenue and EBITDA growth than DRE and FR. I think DRE is awfully expensive at the present time so I would not buy shares at the present time.
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Thank you for your comments
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