Of all of the types of investments I have experience with, I really feel like real estate investment trusts, or "REITs" are the worst to attempt to trade on valuation, or market timing metrics. Like precious metals, REITs are not there to make trading profits. You buy REITs for two purposes: Dependable income, and as an inflation hedge. And like metals, going long or short is a fool's game, because the overall economy cannot be predicted with any degree of precision. Lately I've been seeing articles saying that you should sell Realty Income Corp. (O), also affectionately known as "The Monthly Dividend Company", based on the fact that their share price has seen a sharp run up, and historically, has seen a sharp drop afterwards. Here's the problem with that. Every other trader in the world is able to see the same chart you are, and they are equally convinced that they see the pattern. So they're going to try to outsmart you by buying on the trendline while others are selling. If you wait to buy, or if you go short, you're probably going to miss the timing and either pay too much, or lose too much on the short. How to fix this habit. Allocation. Decide ahead of time how much of your portfolio you want to have in real estate, and buy and sell when the percentages of your assets are off, not on what you think inflation or the economy will do. Will it be 5% of your portfolio? 10%? If the dividend yield was higher I'd say take a larger stake, but for me, 5% is a good target. So here's how it works: You get your monthly dividends, and if you have less than your target allocation, you buy REITs. If you have more, you buy stocks, as the case may be. You'll get the best of both worlds this way. If inflation upticks and your REITs shoot up in value, you'll know to sell some and lock in the profits. If they crater, you'll be increasing your future income by buying low. Diversify somewhat, get a couple of commercial REITs like Kimco (KIM), some apartment or housing REITs like Equity Residential (EQR), and maybe a mortgage REIT or two. I like Annaly Capital (NLY) in that area, but be aware that last one will be very volatile for a while. Nothing is perfect, but following this advice will add stability to your portfolio. I am long all of the REITs mentioned herein.