Tuesday, March 10, 2009

How to Attain Stability in Your Portfolio By Investing in REITs and Skipping the Stock Market and Mutual Funds

If you have been watching the regular investment world like the stock market and mutual funds, you may think you don't want to let your money get anywhere near those fund stealers. In recent months you have seen stocks plummet. Many companies have been completely wiped off the map and all those investment funds with them.

But at the same time, you would love to have an option to make a little more money with that extra cash that you have. What can you do? This may be a time to look into real estate investing.

Historically, real estate is a pretty safe investment field. 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 tank and fall apart, real estate tends to be the constant that holds strong as some of your other investments may be failing.

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

While you may not want to go 100% into real estate, if you are building a well-diversified portfolio, you should try to have at least 10-20% of that portfolio real estate related. This will give your investments a strong backbone that helps you in case you need to hedge against a bad day on the market.

The best way to get into real estate investing is through REITs or real estate investment trusts. These are essentially real estate development or real estate management groups that want to purchase, build and then maintain property units. These could be 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 maintaining. In return, as they make profits, you will get a portion of those profits sent to you as a dividend. As a matter of fact, REITs must 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 once people rent homes, business buildings, etc, they tend to stay there, meaning the profit will keep coming in year after year.

Getting in on the REIT game 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 you need to begin the process and research the REITs out there to being able to make the purchases for you, they can do it all as they are a real estate broker as well. Once you have made the purchase, you can even use their tools to monitor your investments and keep an eye on how that new

Should I Invest in Stocks, Mutual Funds or REITs?

If you are compiling your investment portfolio, you likely have a lot of items that you are considering. Do you want stocks or mutual funds? Local or international? And have you considered real estate?

Often when people are asked if they have considered investments in real estate they envision having to plunk down a lot of money to purchase whole property. That's far outside of the budget of most people. They may have a few hundred or thousand dollars to spend, but not enough to purchase large pieces of commercial or residential property, which tend to be in the hundreds of thousands of dollars.

Likewise you may think of all the hassle that goes with purchasing property and wonder why anyone would ever consider buying real estate as an investment because it is such a nightmare. Well, it doesn’t have to be.

Instead of purchasing property outright, what if there was a way to invest in real estate without all of the hassle of purchasing the title and deed to a property and much less funds? There is. It's called a real estate investment fund or REIT. A REIT is essentially like a mutual fund of real estate.

Instead of buying a complete piece of property, you are buying shares in a real estate management group that will then purchase and maintain a property.

So, you may be wondering, how do you make a profit? Well the way REITs work is that as they make money, 90 % of that earning has to go to the shareholders. This is money you will get in the form of dividend payments.

Essentially, REITs are the best of all worlds. Not only are they secure real estate investment options, but also they are also just as liquid as the stocks and bonds you are used to.

Most financial advisors recommend having at least 10% of your portfolio be associated with real estate. The reason for this is that those investments are more secure than other stocks and mutual funds and just a swing of the market can wipe you out on all of the other investments, while the real estate should hold up through the tough times. This gives you a hedge for those other, more volatile investments.

Getting involved with REITs is also a lot easier than you would think. Begin with a real estate broker like REITBuyer.com. By working with REITBuyer.com, you will be able to start at the beginning and get everything you need.

Begin by doing your research. They have articles and research tools that will help you investigate the REITs you are interested in so you can get a feel for which ones best fit your portfolio.

When you are ready to buy, they can take care of that as well, as they are a complete real estate broker and can handle your investments in a professional manner.

Finally, once you have made the purchase, use their tools and analysis options to keep an eye on how your investments are doing and size them up to the rest of the market.