REITs

[Danny Diaz]

Has anyone been involved with REITs? Is it a good route to go down?

[Trevor Ewen]

@Danny Diaz 

I own several REITS. Couple domestic, one foreign.

Particularly in the traditional real estate investing community, there are many different opinions on the value of investment products (those traded on stock exchanges). I don't want to open up that debate here. Let's just understand that I believe stocks, bonds, funds, and physical real estate can be used to build wealth. I also believe that the whole is greater than the sum of the parts.

I use REITs as another way to diversity my stock portfolio. It makes up a smaller percentage than my corporate stocks, but it tends to have a lower correlation with corporate stocks and bonds, and that provides strength through diversity. 

I treat my physical real estate as a separate category. Thus, while I invest in REITs on a weekly basis, I do not consider any of that investment as a contribution to my real estate goals. Instead, I view it the same way I would a stock purchase. There are some who would disagree with this distinction. I think it's keen to note that when you buy a REIT, you are buying shares in a company that purchases and manages real estate. For this reason, I think of it like a stock.

Hope that's helpful. If you want to talk about more of my philosophy on the relative value of these products, feel free to send me a message.