Dueling Fools: Gold Bear Rebuttal

I completely agree with my dueling partner Robert Aronen that the government has both a terrible habit of causing inflation -- and a desire to do the same -- by debasing the greenback. That said, one class of assets has historically done extremely well in throwing off income that rises at least as fast as inflation: REITs (real estate investment trusts). A rising dividend is a far better tool for purchasing-power preservation than a hunk of metal.

After all, if you need to spend the wealth your gold has preserved for you, you lose the gold -- and the wealth it preserved. On the flip side, if you spend the dividends your investments have generated, you still keep the stocks that created them. Since you've bought them for the rising dividend, in fact, if things work out, you'll have even more cash to spend the next year -- all without having to sell your shares.

Since Robert mentioned gold's meteoric ascent over the past five years, I figure it would only be fair to point out just how far and fast some REIT distributions have risen in that period, too:

Company

2002
Distributions

2007
Estimated
Distributions

Total
Distribution
Growth

Simon Property Group (NYSE: SPG  )

$2.18

$3.36

54.48%

SL Green Realty Corp (NYSE: SLG  )

$1.79

$2.80

56.08%

Developers Diversified Realty (NYSE: DDR  )

$1.52

$2.64

73.68%

CBL & Associates (NYSE: CBL  )

$1.16

$2.02

74.14%

General Growth Properties (NYSE: GGP  )

$0.89

$1.80

102.24%

Rayonier (NYSE: RYN  )

$0.64

$1.88

193.75%

It comes down to one simple question. Which would you rather have: a golden egg, or the goose that reliably lays them? I'll take the goose, thank you very much -- even if I do have to pay for its feed using ever-debased paper currency.

You're not done with the Duel yet! Go back and read the other arguments, then vote for the winner.

Our Motley Fool Income Investor newsletter covers dynamic dividend payers with the REIT stuff. See for yourself with a free 30-day trial subscription.

At the time of publication, Fool contributor Chuck Saletta did not directly own shares of any company mentioned in this article, but his wife owned shares of General Growth Properties. The Fool has a disclosure policy.


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