Digital Realty Trust (NYSE: DLR), recently down 43% from its 52-week high, should draw the attention of those seeking investments in the internet and in real estate. It’s a real estate investment trust, or REIT, which means 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 facilitate our online lives.
Digital Realty Trust recently boasted more than 4,000 customers across 300-plus facilities in more than 50 metropolitan areas in 27 countries on six continents. It’s a notable industry consolidator, having made six major acquisitions in recent years, which expanded its footprint by more than 100 properties. This has increased its presence in the U.S., Europe and new markets such as Africa.
Digital Realty has an investment grade-rated balance sheet. That should give it the financial strength it needs to muddle through tough times. It also has a huge market value (recently $29.6 billion), making it one of the largest REITs in the world.
As long as the world continues to use the internet, Digital Realty’s data centers will be important. The company pays a dividend – recently yielding a hefty 4.9% – and it has increased its payout for 17 consecutive years. (The Motley Fool owns shares of and has recommended Digital Realty Trust.)
Ask the Fool
Q. Can I invest in a Roth IRA and withdraw money from it whenever I need to? – C. W., Augusta, Georgia
A. Generally, no. A Roth IRA is a retirement account designed to let you build a nest egg for the future. Its rules require you to have the account for at least five years, and to not take withdrawals until age 59½. If you follow the rules, withdrawals are tax-free, which can be a powerful benefit in retirement.
You can withdraw sums you contributed at any time, tax- and penalty-free, but withdrawing any earnings those sums generated in the account can trigger taxation and/or a 10% penalty, depending on how long you’ve had the account. There are a few exceptions, though, such as withdrawals for a first-time home purchase or for qualified education expenses that let you avoid penalty charges and/or taxes. Learn more at RothIRA.com and Fool.com.
Never keep any money that you might need within five (or, to be more conservative, 10) years in stocks, as the stock market can be volatile. Short-term dollars are best kept in bank accounts, certificates of deposit (CDs), money market accounts or other less volatile places.
Q. If I hold some paper stock certificates for a company that’s still around, how do I sell those shares? – L. R., Butler, Pennsylvania
A. Paper certificates can be a hassle; most shares are just owned electronically these days. Your brokerage may be able to handle the matter for you. Otherwise, call the company or check its website’s “Investors” page to see what “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 dumbest investment
My dumbest investment? It was buying shares of InfoSpace. That didn’t turn out well. – R.G., online
The Fool responds: Ouch. You weren’t alone in losing money on InfoSpace. (Microsoft co-founder Paul Allen reportedly lost several hundred million dollars.)
The company was once worth more than $31 billion, topping even Boeing in market value, but by 2008, its value had fallen by over 99% – after numerous troubles and scandals. For example, in 2002, the company ousted founder Naveen Jain from his posts as chairman and CEO, and there were accusations of improper stock trading as well.
Many who didn’t look closely at the company over the years lost money. In 2007, for example, InfoSpace posted a profit, but that was from selling off assets, not from profitable operations. At that point, 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 the InfoSpace search business for $45 million.
Don’t kick yourself too hard over this – nearly all investors regret some investment choices. The key is to learn from each one and, ideally, to make fewer and fewer mistakes. The inevitability of having some bad investments is why you shouldn’t put too much money into any one stock.