REIT Investment

Real estate investment trusts (REITs) offer outstanding benefits for investors; as a result, they are one of the fastest-growing sectors of the financial market. Most analysts recommend that REIT investment should comprise 20% of the total stock portfolio; this is due to the outstanding diversity, liquidity, and performance of these real estate securities. REIT investment is relatively low risk in comparison to other types of securities investment due to the historically solid performance of real estate over time. Main benefits of REIT investment include transparency of the securities, high liquidity, above-average performance, and the ability to diversify a stock portfolio with one simple investment.

REIT Transparency

Investing in REITs requires a significant amount of research; REIT research is made easy by the exceptional transparency provided by REITs to their shareholders and potential investors. Most REITs are regulated by the SEC and provide detailed information on their component securities, including the percentage and identity of securities incorporated into the REIT investment. This makes REIT research an easy task for prospective investors and ensures that investing in REITs is a well-informed decision.

REIT Liquidity

While real estate itself is not a particularly liquid commodity, REITs are one of the most easily traded securities. Although REITs incorporate equity and mortgage securities, investors can buy, sell, hedge, and option REIT investments just as easily as they trade any other stock; in terms of investing, REITs combine long-term profitability with short-term flexibility, making them one of the most liquid securities on the market.

REIT Performance

For those interested in long-term investing, REITs offer solid performance and profitability. Despite temporary downturns, REIT investment trends upward overall and REIT returns have outperformed the stock exchange markets over the long term. Real estate values have increased in value considerably over the last twenty-five years and this trend shows no signs of abating. Even in the short term, REIT returns have demonstrated high potential for profit with less risk than most other securities. Investing in REITs is a solid short-term and long-term strategy.

REIT Diversification

In order to reduce risks, most financial advisors recommend diversifying the investment portfolio to incorporate different types of securities. REIT investments can provide valuable real estate exposure; additionally, REIT funds are often diversified across the real estate spectrum and usually include commercial and industrial properties mingled with residential mortgage securities from geographical locations all over the country and around the world. By investing in REITs, shareholders can enjoy instant diversification of their portfolio with less risk attached to the investment overall; this combination of factors makes REIT investment a sound financial choice for most investors.
Tim Ord
Ord Oracle

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