Source: Wealth Management | Repost Serenity Alts 9/18/19
Real Estate Investment Trusts (REITs) have unique characteristics that may make them attractive to both income and growth investors. REITs trade like stocks and can fluctuate in price, but they also pay out a large part of their income in the form of dividends.
REITs may be used to help provide income in conservative portfolios or long-term growth in more aggressive portfolios. Some portion of every portfolio may be appropriately allocated to REITs for a broad range of investor types.
As outlined on the website of the National Association of Real Estate Investment Trusts, REITs of all types collectively own more than $3 trillion in gross real estate assets across the U.S., with stock exchange listed REITs owning approximately $2 trillion in assets. U.S. listed REITs have an equity market capitalization of more than $1 trillion.
REITs historically have delivered competitive total returns, based on high, steady dividend income and long-term capital appreciation. Their comparatively low correlation with other assets also makes them an excellent portfolio diversifier that can help reduce overall portfolio risk and increase returns.