Famed investor Warren Buffett has said that the best holding period on a stock is forever, but not many stocks involve businesses that have the economics to warrant that level of holding. Sooner or later, growth finally slows as just about every business starts to lose its grip on its sustainable competitive advantages.

But there is one business type that has better tools to help it stand the test of time: Real estate investment trusts (REITs). REITs own and lease real estate properties. In exchange for hefty breaks on corporate income taxes, REITs must pay out the vast majority of income as dividends to shareholders. This distinction along gives REITs a leg up as a long-term investment option. Stocks that pay no dividend don't really offer a return until you sell.

The REIT we'll talk about today, W.P. Carey (NYSE: WPC), is set up well for a holding period of forever thanks to its portfolio diversification, low volatility, and growth prospects. It also currently sports a 5% dividend yield.

Continue reading

Source Fool.com