I personally like keeping my 401k or a part of it in stock equities for diversification purposes....I know this won’t be a popular position on BP.  

Our clients have done well when they found a home with a small in-law/casita addition to the subject, brings a nice diversification.

Diversification is also a great reason to do both.

Passive investing so it's not you taking late calls or handling property issues, tax benefits, typically a cash flowing investments, diversification.

Additionally, the diversification that comes with a fund investment can spread out potential risk that could be present in a single property.Higher returns: Larger properties create economies of scale that result in better cash flow.

We own the beach house not to make money, but to protect our assets, i.e. diversification, so we are totally fine with a 5% return (similar to a conservative mutual fund) and want the investment to be as much hands-free as possible. 

For a little diversification, maybe pick one other market or just do another one in the area where you live and know best, but I fell for the lie that more total doors/assets is better. 

Is it diversification, cash flow, to build wealth, quit a job, retire early, but a kid through college...Step 4: Get a surface level understanding of the various niches of REI.

Diversification is a good thing, and these brokerage accounts are a mechanism to keep contingency funds or earnings actively deployed within the program as opposed to sitting idle in cash.That said, there may be benefits to maintaining a separate IRA elsewhere for reasons of asset segregation. 

In a situation such as yours, real estate being more of an income diversification or retirement vehicle, turn-key or minimum value-add would be the way to go.