On March 18, the Federal Reserve gave  its clearest hint yet that interest rate hikes are coming. The Fed will no longer “remain patient,” which suggests that the time for action is near.

Against that backdrop,  real estate investment trusts, or REITs, have been punished. In the last month and half the Vanguard REIT Index (NYSE: VNQ) has fallen 3%.

#-ad_banner-#Yet is such concern warranted? After all, the yield on the 10-Year Treasury bill just slipped back below 2.0%, even after the Fed shifted its tone. Even if 10-year yields were to rise from the current level to 2.5% or 3%, investors in search of income will not completely abandon REITs that yield between 4% and 6%.

Another way to look at an eventual rebound in rates: it signals a firmer economy, which should be beneficial to real estate firms.

In the end, speculation about interest rates is just distracting noise. Your goal should be to add great businesses to your portfolio at opportune prices. Use the volatility in high-yield securities to add long-term winners to your portfolio.

HCP, Inc. (NYSE: HCP), Digital Realty Trust, Inc. (NYSE: DLR) and Omega Healthcare Investors, Inc. (NYSE: OHI) are all down 8% or more in just the last few weeks. All yield 3.7% or more and will provide growth and income to investors for years to come.

HCP, Inc. (NYSE: HCP)
HCP  is a healthcare REIT that primarily invests in senior housing and skilled nursing facilities, though it also has investments in hospitals, life science facilities and medical office buildings.

This is a company with an impressive track record. Since 2009, HCP has been growing funds from operations, or FFO, 7% per year. The aging United States population provides a long-term tailwind in the form of growing demand for senior living facilities.

HCP yields 5.6% and has been raising its dividend for 29 consecutive years. For a company with this kind of track record and long growth runway, it trades at a very reasonable 13 times trailing funds from operations. HCP is a good buy at a recent $41.66.

Digital Realty Trust, Inc. (NYSE: DLR)
Digital Realty Trust has a differentiated business model compared to other equity REITs. It owns and operates data centers that house servers (among other things) for major corporations. Demand for Digital Realty’s services will continue to grow over time as companies use the internet to collect and store data, process transactions and coordinate with customers.

Digital Realty yields 5.3% and has been growing its dividend an astounding 18% per year over the last five years. It trades for a reasonable 13 times trailing funds from operations. Solid cash flow means DLR will continue returning cash to shareholders with that terrific dividend.

Omega Healthcare Investors, Inc. (NYSE: OHI)
Omega Healthcare operates in a similar space as HCP. The REIT owns healthcare facilities that focus on assisted living and skilled nursing facilities. It also stands to benefit from America’s aging population.

Omega Healthcare’s business performance over the last five years has been exemplary. It was able to maintain its dividend through the financial crisis, and since 2009, has grown its dividend 13% per year. That’s a tick below adjusted funds from operations growth of 14% per year. It currently yields 3.7% and trades at an attractive 13 times trailing FFO.

Risks To Consider: There is almost certain to be more volatility in stocks related to Fed policy, especially stocks that sport high yields.

Action To Take –> If you’ve considered dropping REITs on interest rate fears, know this: if the Fed does raise interest rates, the effect will likely be a stronger dollar relative to other currencies. Multinationals will struggle, but REITs that primarily operate in the United States, like the three companies profiled here, won’t have problems with currency translation. REITs provide great diversification for stocks, are a natural inflation hedge and should be part of every investor’s portfolio.

Omega Healthcare is the my favorite of the three above and is a buy at current levels. I will be watching all these stocks very closely and will begin positions in DLR and HCP if either falls much further.

Not only does StreetAuthority’s resident income expert hold a few divided-paying REITs in her portfolio — as well as other securities of every variety — but she uses them to build long-term wealth. Since Amy Calistri began using this strategy in The Daily Paycheck, she has earned more than $76,000 in dividends. We, at StreetAuthority, have been so impressed that we urged her to spread the word to a wider audience. That’s why, for the first time, Amy took the stage to explain exactly how The Daily Paycheck strategy works. If you haven’t already, I encourage you to watch the exclusive presentation here. You won’t be disappointed.