How Risky are REITs? An investor rightly may ask that question and this article is intended to provide important insights to prospective investors in real estate investment trusts (REITs). REITs are unique investments that offer a convenient way for investors to gain exposure to real estate markets, to diversify their portfolios and to earn income. Keep reading to learn about the returns of REITs and the risk of such investments.
The passive and active investment approaches have different levels of risk associated with them. For example, an investor who is hesitant about investing in REITs and wants to minimize risk may opt to invest in a REIT mutual fund or ETF because the diversification of those options can be safer. The active investing approach comes with more risk, but has the potential to give greater returns. REITs provide multiple unique benefits and they have the potential to greatly enhance investment portfolios. However, different REIT investments come along with varying degrees of risk.
Source: Dividend Investor
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