Real estate investment trusts (REITs) have become increasingly popular among investors seeking exposure to the real estate market without the hassle of owning and managing properties themselves. The premier name among retail REITs, along with a 14%-yielding REIT that's returned $25 billion to its shareholders since going public, have attracted significant attention in recent years.
Although investors dislike pullbacks in the stock market, the ability to purchase quality stocks at bargain prices is a real advantage for those looking to build a diversified portfolio. REITs, in particular, can offer attractive dividends and potential for capital appreciation over the long term.
Over the past three years, the Fund, on average, has outperformed the Index by 8.5% per year, as highlighted in the chart below, demonstrating the potential for strong returns in the REIT sector. However, there are also risks to consider, such as interest rate fluctuations and market volatility.
Given the recent talk about higher interest rates being a headwind for real estate investment trusts (REITs), investors might anticipate some challenges ahead. However, the change in interest rate expectations has created a big opportunity for patient investors willing to weather short-term fluctuations in the market.
The U.S. real estate market is more unaffordable than ever before, pushing more people to rent rather than buy and making residential real estate a lucrative investment for REITs. This trend is expected to continue as housing prices rise and affordability becomes a major concern for potential homebuyers.
Most long-term investors are familiar with the consequences of stock prices experience after an analyst downgrade. However, for those who believe in the long-term potential of REITs, market corrections can provide buying opportunities for those willing to take on some risk.
Tower real estate investment trusts (REITs) own and operate cell towers or communication towers. These towers are critical components of the telecommunications infrastructure and provide steady income streams for investors looking for stable returns.
Real estate investment trusts (REITs) allow investors to invest in commercial real estate without actually buying and managing properties themselves, providing an opportunity to diversify their portfolios and potentially earn passive income through dividends.
