Liability Worries Keeping me on the Sidelines

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Hello all, I'm looking to hopefully get some mixed perspectives on this post based upon a nagging worry I have about jumping into REI.

At this point in my life, I have a sizable 401K primarily made up of stocks and have been researching REI over the last several months as a means of diversification. I love my job and don't look to REI as a means to retire early/quit my job/achieve FI, I'm simply approaching it as an an additional investment to add to my portfolio.

That being said, what is keeping me from jumping in is the liability risk in dealing with tenants. I've read up on $2M umbrella policies and putting properties in LLC's, but at the end of the day, do I really want to deal with all this just to have a different type of investment in my portfolio? I would dread ever having to deal with litigation or having part of my 401K that I've worked so hard to grow be at risk (even though this may be low risk). I have access to funds/loans, have seen a few local deals, and found some that pencil fairly well (more so if I'm willing to self manage). But at the same time, I could just pump more money into stocks and achieve similar returns and not have to deal with any of the worry of finding tenants/juggling insurance/dealing with angry or litigious tenants, etc. I run IRR's, NOI's, COCR's and the whole bit and nothing really excites me enough to pull the trigger. I could just sit back and put more money into stocks (or real estate crowdfunding or REIT's) without having to worry about replacing a roof, adjusting insurance, finding tenants, dealing with drama, etc.

With this post, I really just hope to see some different perspectives on my concerns, both for and against moving forward into REI taking into account that my goal is simply diversification at this point. I know some of you might just say that I need to do what's right for me, but I'd be interested to hear everyone's take from their own points of view.

Thanks for your time and thoughts!