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Following current trends of corporate consolidation — think airlines and media companies — Hasbro's offer to Mattel shouldn't seem like too much of a surprise. However, many people were taken aback by the approach from three days ago.

This surprise is apparent in the fact that Mattel stock jumped 20% while Hasbro jumped 8% — investors are pretty happy that this deal is going down. But why might this be?

The Wall Street Journal first reported on Nov. 10 that a potential deal is in the works. This could be due to the fact that Mattel's shares have dropped 47% this year while Hasbro's stock prices have increased 18%.

If the two companies should combine, their shared market price would be around $16 billion. With this strong of a company value, there are many benefits that come with the impending consolidation.

Competition with electronics and tech

Customers walk towards a branch of the toy store Toys R Us on September 19, 2017 in Luton, England. Getty Images

This report is following the fact that Toys'R'Us has recently been bankrupted — as of now, the company owes Mattel at least $135 million which contributed to its drop in shares.

Traditional toys don't have that much appeal in the age of tablets and VR. Hasbro could be attempting to get ahead of the curve of electronics and technology by consolidating.

E-commerce

A worker prepares packages for delivery at an Amazon warehouse on September 4, 2014 in Brieselang, Germany.Getty Images

Another electronic aspect of competition may be from Amazon.com, Inc — Amazon is so popular in the current market, especially with their Prime option. Perhaps Hasbro will also expand more into e-commerce too.

Competition with other companies

A worker arranges a shelf of Hasbro Inc. Nerf Blaster products at a Target Corp. location in Emeryville, California, U.S., on Thursday, July 20, 2017.Getty Images

Traditionally, Hasbro has made over 80 brands of toys such as My Little Pony, Nerf, Transformers, Play-Doh, Littlest Pet Shop and Monopoly, with rights to "Star Wars." If you were an '80's kid, you've probably played with these toys.

Mattel has around 20 brands such as Barbie, Hot Wheels, Fisher-Price and the coveted American Girl dolls — also brand deals with Disney, giving them an edge over the animated market.

With this takeover, Hasbro can focus on extending its influence rather than getting ahead of their competition.

Shelf space

Lego enthusiasts attend the Bricklive at the Scottish Exhibition and Conference Center on July 20, 2017 in Glasgow, Scotland.Getty Images

Hasbro also probably wants more shelf space — currently, Lego controls most of the market's shelf space. If the deal goes through, Hasbro can cut out one of its major competitors for this exclusive real estate.

Why this could be disastrous

Going back to what this really is — corporate consolidation — could be dangerous to small businesses. Big companies have been demolishing small businesses — a prime example being Luxottica separating from Oakley sunglasses due to pricing. Oakley's stock prices thus collapsed.

Corporate consolidation also tricks you into thinking that small businesses are independent when they aren't really — especially with companies such as Tom's of Maine and Burt's Bees. Instead, they're both owned by large corporations.

Hasbro and Mattel's merging could thus continue this pattern of big corporations crushing small businesses.

However, this deal might not even go through — Hasbro has approached Lions Gate Entertainment, DreamWorks Animation SKG and Mattel twice before, with no success.

Back in the 60s, Congress created REITs: Real Estate Investment Trusts—so that the —average American could reap the benefits of income earning property.

REITs allow individuals to invest in large scale income producing real estate, without the hassle and overhead of going out, buying, and managing property.

REITs offer investors multiple benefits: Diversification, Dividends, Liquidity, and Transparency.

While operating under the same rules and regulations as other public companies REITs have, over the long term outperformed the S&P 500, Dow Jones Industrials and NASDAQ Composite, while also showing little correlation to the performance of the broader market.

There are two kinds of REITs:

Equity REITs derive their income from rent on real properties, usually things like malls, industrial facilities, apartment complexes, hotels, hospitals, and more.

Mortgage REITs derive their income from interest earned on mortgages or mortgage securities.

There's some criteria a REIT must meet to qualify—modeled after mutual funds, and recognized as a corporation, it must have a minimum of 100 shareholders, be managed by a board of directors or trustees, invest 75% of its total assets in real estate, and derive at least 75% of its gross income from rents on real property, interest on mortgages financing real property or from sales of real estate.

Should I buy REITs?

I did some research, asked my investing mentor, and checked the performance of my own REITs. I'll let you decide for yourself.

Here's a take from my investing mentor (who opts to remain anonymous).

To start I wanted a REIT in my portfolio some years back to diversify. This was maybe 6 years ago when REITs were booming which they did through '16. My broker recommended Cole, a nontraded REIT. Cole held stand alone commercial real estate occupied by national chains like Walgreens. Their occupancy rate was high and the renter assumed most or all of the maintenance. It was golden. I received a 6.5 % dividend till it went public and I made a healthy gain on its sale. I immediately ploughed all my earnings into another Cole REIT. This time there were problems. Cole allowed themselves to be acquired by American Realty which immediately had a compensation scandal.

Cole product sales dwindled immediately nationally as broker confidence in them diminished. Then it looked like Cole was going to be taken over by Apollo Global, a private equity firm at a fraction of their worth. That's when I decided to bail. It was hard getting a redemption from Cole too. They were resistant. There was a minimal redemption penalty as I had held the REIT for some time. The ample dividend it paid more than compensated. With both REITs I walked away with a 50% profit over approximately 4 years. It was a frightening experience. Nontraded REITs are hard to redeem quickly.

Finally, I now hold a tradable REIT fund through my NY Life variable annuity but it's only a small fraction of my portfolio. It's been down as much as 9%. It is rated high risk.

Projections for REITs have been mixed. Some segments have been slated to do well like commercial office space due to the uptick in the economy, and Internet sales storage facilities for companies like Amazon. But I just read an article claiming commercial property overall is now overpriced, and the 7 year REIT rally is ending. Investors have not embraced REITs since they got a separate S&P sector listing. REITs pay around a 4% dividend and are seen as a haven for investors when they are risk averse. This is not the case now, which is why REITs are down.

In an article for Forbes, Brett Owens claims REITs are the sector to take off for 2017. He took pains to bust a common REIT myth that they fall as interest rates rise, and even provides data that proves that REITs actually perform better as rates rise. He also suggest 5 REITs to buy, 3 of which I own personally—Public Storage (PSA), Simon Property Group Inc., (SPG), and Ventas Inc., (VTR).

My own REIT portfolio has yielded 13.2% to date.

REITs are a great way to diversify your portfolio, but do your due diligence before deciding to pull the trigger for yourself!

Check out this resource for more!