You don't need a photographic memory to pinpoint when the Fed started talking about scaling back its monthly asset purchases, the stimulus program otherwise known as QE3...

And you won't have to consult the Investor's Almanac to know when, exactly, the word ?taper? was officially added to investors' vocabulary.

You can see it on this chart, plain as day:

This chart tracks the performance of America's largest real estate investment trusts (REITs).

And, as you can plainly see, a huge sell-off started on May 21, 2013.

Of course, that was the day Fed Chief Ben Bernanke suggested that, at some point, the Fed would spend something less than $85 billion on bonds every month.

Now, we know that the Fed was buying mortgage and Treasury bonds to push real interest rates lower.

And it worked: Yields on the 10-year bond held between 1.6% and 2% for the last 18 months. Anyone who could refinance debt put themselves in a great position to save a lot of money.

What's more, the low bond yields made high-yielding stocks like REITs very attractive.

But of course, just the hint of ?tapering? changed all that...

Bond yields launched and REITs tanked.

So, judging by these charts, it would seem that the end of QE3 means a relentless sell-off for REITs.

But is that really what's going to happen?

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In a very general sense, a real estate investment trust uses debt to buy real estate and then leases that real estate to businesses.

REITs make their money from the spread between the cost of debt and their rental income. And they pay out virtually all of the profit as dividends to shareholders.

There are REITs that own shopping malls and lease space to retailers. Some REITs own office buildings and lease office space. There are health care REITs and even prison REITs.

One thing they all have in common is very good yields  ? often as high as 5%-7%.

Now, there are a couple observations we need to make about REITs...

First and foremost, they do quite well in a low interest rate environment.

That's because their spreads are better when debt is cheap. If they have to finance at high interest rates, they just don't make as much money, and so the dividends are lower.

Second, REITs are pretty stable companies  ? but they are not as stable as bonds.

So when bond yields climb towards 3% and 4%, they become increasingly attractive alternatives to REITs.

The big question for income investors right now is this:  Are REITs down because bonds are finally an attractive alternative, or are investors worried that REITs won't make as much money as interest rates rise?

The answer could be quite profitable.

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I don't blame you if this sounds far-fetched...

In fact, if I hadn't seen it work multiple times firsthand, I wouldn't have believed it, either.

But  once you take a peek  at to how to use this form  ? and the reasons it could make you rich ? I have no doubt you'll change your mind. 

I'm an income guy. I like to get paid to own stocks.

I also manage  The Wealth Advisory  portfolio, which is entirely devoted to income-producing investments.

Needless to say, there are several REITs in  The Wealth Advisory  portfolio. So I have a vested interest in getting the right answer to the questions I just posed to you...

So far this year,  The Wealth Advisory  portfolio is up 26%. We've been helped by some REITs that have put up 137%, 122%, and 42% total gains.

Of course, those gains were better 10 weeks ago however, I think it's an ideal time to start buying REITs. Here's why...

Second quarter earnings season is winding down. I've paid particular attention to the conference calls from the REITs that I've recommended to  Wealth Advisory  subscribers. And they've all been very good.

None have voiced any concern about higher finance costs.

In fact, several REITs I cover have actually raised their profit forecasts for next year. That means higher dividends are coming.

Here's an example of what one CFO said:  ?... these investments will be immediately and strongly accretive to FFO per share... [and]  will drive quarterly growth in our per-share results, as of course will any additional acquisitions, which, given our pipeline, we certainly expect to make.?

He is telling us straight-out that his company will make more acquisitions ? and therefore more money ? this year. They are clearly not hampered by interest rates.

This company currently has $2.8 billion in assets, $230 million in revenue, and a market cap of $2 billion.

Assuming the company can add $500 million in assets a year (which is what it will do this year) with an 8%-11% spread, it can grow revenues around 20% a year. That's pretty good.

This company's main competition have market caps of $19 and $18 billion, respectively. Now, we can't predict that it will grow to that size over the next few years, or even over the next 10 years... but we can say there is upside for the business.

Which means there is upside for the dividend and the stock price.

From current levels, there is 26% upside for this stock this year. I estimate another 26% is likely by the end of 2014. Again, that's pretty good.

If you want some more information on REITs  ?  and how they can help you make easy money  ?  just click here.

Until next time,

Briton Ryle

@BritonRyle on Twitter