BY KRISTIN HOVENCAMP
Geopolitical turmoil, Federal Reserve policy uncertainty, and extreme swings in the broad markets can create tension in even the most battle-hardened investors. The volatility is more unsettling when your nest egg is at stake. Long-term investors can stay the course by investing in a Real Estate Investment Trust (REIT). A REIT is a company that owns, operates or finances income-producing real estate properties.
Access. According to the National Association of REITs, investors can gain exposure to offices, apartment buildings, warehouses, shopping centers, medical facilities, data centers, hotels, gaming, infrastructure, and cell towers with the evolution of REITs. REITs invest in varied geographic regions, property sectors, and real estate qualities.
Liquid securities. Unlike private assets, a REIT can trade on major stock exchanges and offer transparency to shareholders. Investors buy and sell shares just as they would a stock, ETF, or mutual fund.
Regular income stream. Capital appreciation, inflation protection, and dividend income are qualities that attract long-term investors to REITs. REITs are required by law to distribute at least 90% of their taxable income to shareholders annually, in the form of dividends, to maintain tax-exempt status.
Portfolio diversification. Investors seek exposure to stocks, bonds, and alternative investments to generate returns independent of one another and spread risk across asset classes. Income-producing REITs complement traditional securities because of their low correlation and risk-adjusted returns. In times of market uncertainty, a REIT can help dampen portfolio volatility.
During economic uncertainty, adding commercial or residential real estate securities to a balanced portfolio can provide an income stream, liquidity, and diversification.
HAZLETT WEALTH MANAGEMENT, LLC, is independent of Raymond James and is not a registered broker/dealer. Investment advisory services are offered through Raymond James Financial Services Advisors, Inc. Securities offered through Raymond James Financial Services, Inc., member FINRA/SIPC. Investing involves risk and you may incur a profit or loss regardless of strategy selected. Be advised that investments in real estate and in REITs have various risks, including possible lack of liquidity and devaluation based on adverse economic and regulatory changes. Additionally, investments in REIT’s will fluctuate with the value of the underlying properties, and the price at redemption may be more or less than the original price paid. Diversification does not ensure a profit or guarantee against a loss. Past performance may not be indicative of future results. 675 Sun Valley Road, Suite J1 + J2 Ketchum, Idaho 83340 208.726.0605. HazlettWealthManagement.com