Wednesday, December 9, 2009

Investing in REITs to Stabilize your Portfolio

If you are following the stock market and mutual funds, you may think you don't want to let your money get anywhere near those investments. You’ve watched as the stock market plummets as companies go bankrupt, wiping out all the funds that were invested with them.

So you may be keeping your money in the bank while you decide on the best way to invest it. This is a good time to consider real estate investing.

Historically, real estate has been a safe, profitable investment. Many people see the news articles as of late about the real estate market problems. Sure, there are fluctuations, but over the long term, real estate is a wise investment. When other markets fall apart, real estate tends to be the constant that holds strong.

Additionally, if there were to be a complete market downturn, while your real estate investment may lose some of its value the important thing to remember is that with real estate you have a tangible asset that will always have value. That is much more than you can say for your stock certificates.

This doesn’t mean that you should put all your money into real estate; however, a well-diversified portfolio should contain at least 10-20% of real estate related investments. This will give your a strong backbone to hedge against a bad day in the market.

The easiest way to invest in real estate is by purchasing REITs or real estate investment trusts. These are essentially real estate development and management groups that purchase and manage income producing property, including residential, industrial or even commercial real estate ventures.

Instead of purchasing a piece of property outright, you will purchase a share in the group that is doing the purchasing and managing. In return, as they make profits, they pay you a dividend. REITs are required to return at least 90% of their profits to their shareholders. That means if the REIT does well, you are going to get a great return. Even in a moderate year you will likely get a good return.

Additionally, REITs are generally constant and stable as people rent homes or lease buildings. They intend to stay a while; therefore, the income is consistent year after year.

Getting involved in REITs is not too difficult. Begin by going to a website like REITBuyer.com. They have everything you need to add this type of investment to your portfolio. From the information provided you can research the REITs available and begin investing or have the REITBuyer.com brokers do it for you. They also provide online tools to monitor your investments so you know how your portfolio is doing.

REITbuyer.com is an online brokerage information site specializing In REITs and Real Estate Mutual Funds – The World’s first and only site dedicated to REITs Real Estate Mutual Funds. This is a place for the small investor to own a piece of world class real estate.

No comments:

Post a Comment