Quote:
Originally Posted by John Mercier
The REIT would still be better. More diversified, lower carry costs, and lower acquisition costs.
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REIT's are required to pay out 90% of income in dividends. In a bull market, this leaves little extra for investing in new properties and organic growth, so the per share value may suffer. The dividends may be a good part of a diversified portfolio, but an REIT overweight portfolio may not be a good idea. Actually as an aggressive but diversified investor, I can't think of anyplace I would put a majority of my money in a single type of investment, especially as the lead component. BUT, no risk, no reward. My father always told me to take risks early in life "because you can always make it back".
Different perspective: ~45 years ago my sister and BIL bought 600 acres. ASAP, they sold 400 and had minimal $$ exposure on the remaining 200 acres. Tree farmers. They moved onto the land from away 25 years ago. In future, my niece will inherit and plans to move here. To them, this was a great "investment". Maybe we all need to re-think "investment" and think about our grandchildren instead of ourselves.