2 High-Yield Mortgage REITs To Buy For 2021

Stocks to Buy

Today, I want to talk about a type of asset class that’s clearly benefitting from the current pandemic environment: mortgage REITs. But first, let’s talk about the current environment…

We find ourselves in a rather interesting situation. I’m not altogether certain if it’s good or bad. But I’m quite sure it is interesting.

We’re coming off an epoch year. The calendar year of 2020 is one for the ages. A global pandemic brought the world to its knees. The economy crashed as a result of the lockdowns. But the market loves it. The indexes are at all-time highs and giving every indication of moving still higher.

The S&P 500 has rallied more than 70% from the lows of last March. The recent part of the thrust higher is about the vaccines. The approval and distribution of the coronavirus vaccines promise to end the pandemic and lockdown restrictions and unleash a full economic recovery later this year.


The virus might be getting worse right now. But it doesn’t matter. The market tends to look ahead about six months or so into the future. By then, it sees a booming economy, low-interest rates, and an economy drowning in government stimulus. Just when the vaccine rally was starting to run out of gas, stimulus hope is reviving the euphoria.

The Democrat victory in the recent election creates the perception that there will be more government stimulus. And the market loves stimulus. While Wall Street types may look ahead six months, they don’t look any further than that. They live and breathe in the near future only. Telling them about something that will happen in two or three years is like telling them about the year 2046. They don’t know if they’ll still be alive by then. Government stimulus and interest rate cuts are the best things that happen to them in this life.

Say what you will about the current environment. But one thing is clear: It’s good for mortgage REITs.

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