How Realty Income Became My Worst Investment

For regular viewers of my channel, you most likely know that Realty Income has been my favorite real estate investment trust for many years. I’ve been a big fan of this company for a long time, and for a lot of really good reasons. They’re one of only three REIT dividend aristocrats that exist, and they’re the only ones that pay dividends monthly. They have had a 13.4% compound annual total return since their 1994 NYSE listing and a 4.3% compound annual dividend growth rate during that time. Realty Income has also cut its dividend and has had 105 consecutive quarterly increases. Their FFO payout ratio is a conservative 73%, their occupancy rating is far above REIT averages at 98%, and they have a very well-diversified property portfolio.

I could go on and on, but after reading so many of your comments, it became clear that a lot of you were sick of me talking about this company so much. I’ve now gone almost three months without discussing this company in depth, with the exception of covering their acquisition of Spirit Realty, which is going to be another source of revenue growth for them. It’s widely known that Realty Income has a cult like the following, a cult of which I’ve been a member for years. But what I think would surprise a lot of people is that my investment in Realty Income is actually my biggest loser from a financial perspective. I’ve actually lost more money on Realty Income than any other holding in my dividend portfolio. So in this video, I’m going to show exactly how much I’ve lost on this investment to date and discuss how this happened, why I’m not upset about it, and what I think the future holds for Realty Income and my investment in them.

#dividendinvesting #dividends #dividendstocks #realtyincome

[Riggsnic_co]

The thing to me is, if you invest and have other income outside of dividends then you will be able to live off dividends without selling. Which means you can pass that on to your kids which will give them a leg up in life. $52k dividends received in 2022.

[Dantursi]

Successful investing is hard work because it means disciplining your mind to do the opposite of human nature. Buying during a panic, selling during euphoria, and holding on when you are bored and just craving a little action. Investing is 5% intellect and 95% temperament.

[TortoiseInvesting]

O is a reliable income grower, you can count on the 3.5-4% dividend hikes year in and year out. Monthly payer. O is absolutely an amazing REIT and will benefit greatly once rates start getting cut.

[andrei-serbanvaduva]

Dollar cost averaging is one of the golden rules. Dumping high sums of money on a stock is good only when it's a big occasion like Arbor Realty Trust had with those short attacks. Anyways good video as always Allen, keep up the great work!

[jameswood]

I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?

[masoncnc]

I'm -2% at the moment.
If you liked it at 68, you should love it at 58.

[selenajack]

The most important thing that should be on everyone mind currently should be to invest in different sources of income that doesn't depend on the government. Especially with the current economic crisis around the word. This is still a good time to invest in various stocks, Gold, silver and digital currencies

[susangiggs]

Anyone know which stocks might be seeing significant increase this holiday season? A January bounce has been mentioned frequently. I recently sold my Boca Grande, Florida, home, and before the stock market's equities start to recover, I want to invest a big sum. Is it wise to purchase right now or not?

[JWS]

So you bought too much, too high. Just DCA while you collect the dividends. Its not a race. It's a marathon.

[toddc]

Been through this with O a few years ago. Just hang on to it. The track record should speak for itself. The only thing you can't plan for in any stock is crooked leadership like you had with Enron, GE and WCOM in the past. There is no sign of that here, but it does happen. Regardless, the only thing you can do to avoid this is to diversify by not putting too much into O and wait for interest rates to go down. This REIT, bond funds and many others should melt up nicely once the interest rates start to get cut. We are expecting 3 in 2024.

[hannahdonald]

I’m under pressure to grow my reserve that currently holds about $500k. I’m down by 20% already following the crash and I fear I could lose more.

[Karenlisa]

Great video, a number of the most eminent market experts have been expressing their views on the severity of the impending economic downturn and the extent to which equities might plummet. This is because the economy is heading towards a recession and inflation is persistently above the Federal Reserve's 2% target. As I'm aiming to create a portfolio worth no less than $850, 000 before 1 turn 60, I would appreciate any advice on potential investments.

[blinddog]

But is it bad? You said you are a dividend investor and stocks go up/down, but we focus on the dividend and stability of it.

[humbleDon]

That monthly dividend is too addictive

[steveanthony]

Only about 3 years experience investing with a focus on dividends and, without question my biggest flaw has been buying into a holding in chunks rather than bits and pieces. I'm up on O but I see too much red in other areas that constantly remind me of past poor decisions. Thanks for the video.

[ContrarianExpatriate]

I sold all my O and bought more S&P 500 after I saw last year's performance of both, AND I learned that REITS are unable to generate qualified dividends, only ordinary which is a tax nightmare.

[DayCab]

Ignore the paper hands. Price does not change the amount of shares you own.

[cashflow]

My average cast is 52.90. My 1100 shares is giving me $282 a month. I’m not selling but buying more if it ever falls below my cost.

[BTBLive]

My cost basis is about $62 on O ....BUT it's nice seeing that number drop as I keep adding shares to my position in addition to the re-invested divs. A red line on my portfolio is only part of the story :)

[jamesp]

I'm glad it's moving up slowly, gives me time to accumulate as much as possible before a more stimulating rate environment materializes.