Lesson 7 of 8
REITs & Commodities
Real estate and raw materials without buying a building or a barrel of oil
REITs
Companies that own real estate
Must pay 90% of income as dividends
VNQ ETF: ~3.5% yield
Avg ~7% annual return since inception
Commodities
Gold, oil, agriculture, metals
Hedge against inflation
Gold: ~$4,800/oz in April 2026
Up 43% year-over-year
Real REITs you can buy today
Realty Income
"The Monthly Dividend Company." Retail property. Boring, steady paycheck stock.
American Tower
Cell towers worldwide. Lower yield but growth driven by 5G rollout.
Prologis
Industrial warehouses, the picks-and-shovels of e-commerce.
Vanguard REIT ETF
One-click exposure to the whole REIT space. Easy mode.
W. P. Carey
Cut its dividend in 2023 when it spun off office properties. Yield traps exist in REITs too.
REITs are rate-sensitive. They fell hard in 2022 when rates spiked, and recovered as the Fed eased. Don't chase yield blindly.
Commodity exposure via ETFs
Gold
Up 43% year-over-year. The classic store-of-value play.
US Oil Fund
Tracks oil futures. Suffers from "contango" decay, not a buy-and-hold.
Agriculture
Corn, wheat, soybeans, coffee. Thin, usually a specific thesis trade.
Silver
More volatile than gold, less liquid, often the worse risk/reward.
VNQ (Vanguard Real Estate ETF). REITs move differently from stocks, especially when rates change.
inflation hedge
When inflation runs hot, real estate and gold tend to hold value while bonds get crushed. A small allocation (5-10%) can stabilize your portfolio.
Check yourself
Why must REITs pay 90% of income as dividends?