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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

  • Writer's pictureSummit Puri

REIT – Real Estate Investment Trusts

Alternative Investment Class

In a previous post, we explored Dave’s recommended four asset class selections for your investments: growth, growth and income, aggressive growth, and international. If you’d like a refresher, enjoy the quick read here.

 

These asset classes provide good diversification and exposure for most investors. However, I introduced the alternative asset class towards the end of that post. This class of investments doesn’t fit in the conventional equity, income, or cash categories (hence the name). However, they can provide additional exposure and opportunity when searching for that ever-elusive alpha.

 

Alternative asset classes come in a variety of flavors and have their own nuances to understand. Consider discussing these with one of our Financial Advisors to determine if they fit your strategy and portfolio well.  

 

Specifics around liquidity, taxes, redemption fees (if present), hold period, NAV (net asset value), and minimum investment requirements have made these more difficult to obtain for the general investor. Certain funds within this class are often only available to high-net-worth individuals. However, we are seeing more and more alternative investment funds maintaining lower QP (qualified purchaser) requirements. We will explore all angles of alternative investment class assets in future posts (including private vs. public equity, a very hot topic right now). Still, for today’s discussion, we’ll focus on REITs.

 

REIT – Real Estate Investment Trusts

Real Estate Investment Trusts (REITs) have become a popular investment vehicle, offering individuals a unique opportunity to invest in real estate without the burdens of property management. REITs typically own and operate income-producing real estate, such as office buildings, data centers, shopping malls, apartments, student housing, and hotels. Investors can buy shares of publicly traded REITs, similar to stocks, or invest in non-traded REITs through private placements.  One of the most enticing aspects of REITs is their potential for high dividends, as they are legally obligated to distribute a significant portion (90%) of their income to shareholders.

 

Diversification is a significant advantage of investing in REITs. By pooling funds from multiple investors to invest in a portfolio of properties across different sectors and geographic locations, REITs offer investors exposure to a diverse range of real estate assets. This diversification helps reduce the risk associated with investing in individual properties and markets, making REITs an attractive option for those seeking to spread their risk.

 

Another benefit of investing in public REITs is their liquidity. Unlike owning physical real estate, which can take time and effort to buy or sell, investors can easily buy and sell shares of publicly traded REITs on stock exchanges. This liquidity allows investors to adjust their real estate exposure quickly in response to changing market conditions or investment objectives. Unlike public REITs, private REITs are semi-liquid. In a future post, we’ll explore the differences between public and private REITs.

 

REITs also offer the potential for capital appreciation. While the primary source of returns for REIT investors is typically dividends, the value of REIT shares can also appreciate over time as the underlying real estate properties increase in value.

 

This potential for capital appreciation, combined with the steady income from dividends, can make REITs a compelling investment option for both income-oriented and growth-oriented investors. Remember that REITs' tax benefits are also important to consider. As income is distributed, it can be categorized as ordinary income, capital gains, or return of capital. We suggest you consult your tax advisor or our in-house CPA for advice.

 

As with all investments, it's important to carefully evaluate REITs before investing. Understanding the risks, benefits, and alignment with your strategic goals must be considered. Risks with REITs to consider are changes in interest rates, property values, occupancy rates, and economic conditions. Additionally, not all REITs are created equal, and you should conduct thorough research to understand if this investment class is right for you. Luckily, our team at Whitaker-Myers Wealth Managers has conducted this research and can help determine if this investment class is a good fit for your portfolio.

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Whitaker-Myers Wealth Managers is an SEC-registered investment adviser firm. The information presented is for educational purposes only and intended for a broad audience. The information does not intend to make an offer or solicitation to sell or purchase any specific securities, investments, or investment strategies. Investments involve risk and are not guaranteed. Whitaker-Myers Wealth Managers reasonably believes that this marketing does not include any false or misleading statements or omissions of facts regarding services, investment, or client experience. Whitaker-Myers Wealth Managers has a reasonable belief that the content will not cause an untrue or misleading implication regarding the adviser’s services, investments, or client experiences. Please refer to the firm’s ADV Part 2A for material risks disclosures.

Past performance of specific investment advice should not be relied upon without knowledge of certain circumstances of market events, the nature and timing of the investments, and relevant constraints of the investment. Whitaker-Myers Wealth Managers has presented information in a fair and balanced manner.

Copyright (c) 2023 Clearnomics, Inc. and Whitaker-Myers Wealth Managers, LTD. All rights reserved. The information contained herein has been obtained from sources believed to be reliable, but is not necessarily complete and its accuracy cannot be guaranteed. No representation or warranty, express or implied, is made as to the fairness, accuracy, completeness, or correctness of the information and opinions contained herein. The views and the other information provided are subject to change without notice. All reports posted on or via www.clearnomics.com or any affiliated websites, applications, or services are issued without regard to the specific investment objectives, financial situation, or particular needs of any specific recipient and are not to be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. Past performance is not necessarily a guide to future results. Company fundamentals and earnings may be mentioned occasionally, but should not be construed as a recommendation to buy, sell, or hold the company's stock. Predictions, forecasts, and estimates for any and all markets should not be construed as recommendations to buy, sell, or hold any security--including mutual funds, futures contracts, and exchange traded funds, or any similar instruments. The text, images, and other materials contained or displayed in this report are proprietary to Clearnomics, Inc. and constitute valuable intellectual property. All unauthorized reproduction or other use of material from Clearnomics, Inc. shall be deemed willful infringement(s) of this copyright and other proprietary and intellectual property rights, including but not limited to, rights of privacy. Clearnomics, Inc. expressly reserves all rights in connection with its intellectual property, including without limitation the right to block the transfer of its products and services and/or to track usage thereof, through electronic tracking technology, and all other lawful means, now known or hereafter devised. Clearnomics, Inc. reserves the right, without further notice, to pursue to the fullest extent allowed by the law any and all criminal and civil remedies for the violation of its rights.

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