Digital Realty Trust (NYSE: DLR ), recently down 43% from its 52-week high, should be of interest to those looking to invest in the internet and real estate. It’s a real estate investment trust, or REIT, meaning it owns and rents out properties, spending at least 90% of its income on dividends to shareholders. Its property portfolio is focused on data centers where vast banks of computers make our online lives easier.
Digital Realty Trust recently boasted more than 4,000 clients in more than 300 properties in more than 50 metropolitan areas in 27 countries on six continents. It is a notable industrial consolidator that has made six major acquisitions in recent years, expanding its footprint to more than 100 properties. This increased its presence in new markets such as the US, Europe and Africa.
Digital Realty has an investment grade balance sheet. This should give him the financial strength he needs to get through the tough times. It also has a huge market cap ($29.6 billion recently), making it one of the largest REITs in the world.
As the world continues to use the Internet, Digital Realty’s data centers will be important. The company pays a dividend — most recently yielding a whopping 4.9% — and it has raised its payout for 17 consecutive years. (The Motley Fool owns and recommends shares of Digital Realty Trust.)
Ask the fool
Q. Can I invest in a Roth IRA and withdraw money when needed? – CW, Augusta, Georgia
A. In general, no. A Roth IRA is a retirement account that allows you to build a nest egg for the future. Its rules require you to hold the account for at least five years and not withdraw funds until age 59½. Withdrawals are tax-free if you follow the rules, which can be a powerful benefit in retirement.
You can withdraw your contributed amounts at any time, tax-free and penalty-free, but withdrawing any account earnings may result in taxation and/or a 10% penalty, depending on how long you’ve had your account. However, there are a few exceptions, such as a first-time homebuyer or a deduction for qualified education expenses that allow you to avoid penalties and/or taxes. Learn more at RothIRA.com and Fool.com.
Never keep any money in stocks that you might need in five (or more conservatively, 10) years because the stock market can be volatile. Short-term dollars are best kept in bank accounts, certificates of deposit (CDs), money market accounts, or less volatile locations.
Q. If I own some paper stock certificates for a company that is still in existence, how can I sell those shares? – LR, Butler, PA
A. Paper certificates can be a hassle; Most stocks these days are held electronically. Your mediator can resolve the issue for you. Otherwise, call the company or check the “Investors” page of its website to see which “transfer agent” it uses, as the agent can probably buy your shares from you. Learn more about these and other options at WikiHow.com/Sell-Stock-Certificates.
My stupidest investment ever
My dumbest investment? He was buying shares of InfoSpace. This did not go well. – RG, online
The fool replies: oh You weren’t alone in losing money on InfoSpace. (Microsoft co-founder Paul Allen lost several hundred million dollars.)
The company once had a market capitalization of more than $31 billion, surpassing even Boeing, but by 2008 its value had fallen by more than 99% after numerous problems and scandals. For example, in 2002, the company removed founder Naveen Jain as chairman and CEO, and there were allegations of improper stock trading.
Over the years, many of those who didn’t watch the company closely lost money. For example, in 2007, InfoSpace turned a profit, but it was not from profitable operations, but from the sale of assets. At that time, InfoSpace’s share of the search engine market was less than 1%. InfoSpace changed its name to Blucora in 2012, and in 2016, Blucora sold its InfoSpace search business for $45 million.
Don’t kick yourself too hard for this – almost all investors regret some investment choices. The key is to learn from each one and ideally make fewer and fewer mistakes. The inevitability of having some bad investments is that you shouldn’t put too much money in any one stock.