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Investing Specialists

Time for a Second Look at REITs

Real estate has lagged lately, but it’s still worth including in a portfolio.

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Real estate investing is one of those topics that spurs division. From time to time it’s either lauded as investing’s saving grace or derided as something to be avoided at all costs. In this piece, I’ll take a more balanced look at the pros and cons, as well as the role real estate holdings can play in a portfolio.

First, some definitions are in order. For the sake of this article, I’ll focus on investing in equity real-estate securities, primarily real estate investment trusts. REITs are companies that own and/or operate real estate properties, including shopping malls and other retail outlets, office buildings, warehouses, apartment buildings, and hotels.

Amy C. Arnott has a position in the following securities mentioned above: VGSIX. Find out about Morningstar’s editorial policies.