|Question of the week: I've always invested in plain vanilla stock funds, but lately I've been thinking of branching out a bit. I've noticed that REITs have really done well lately. What do you think about them? --O.L.|
Real estate investment trusts (usually known as REITs, but also called real estate stocks) enjoyed a total return of 37.5 percent last year, according to the SNL Equity REIT Index. So you're not the only one paying attention to this unique investment.
Not surprisingly, when we asked members of the Armchair Millionaire community about their experience with REITs, we heard some positive responses. Here are two:
"I invested in a group of REITs designed by my broker 19 months ago and am up by 20 percent, so I am very happy." --Posted by Jean L.
"I have invested in REITs and have been pleased with the dividends and the increase in the value of my shares. If they continue to do well I will add more shares next year." --Posted by John T.
REITs offer an easy way to invest in real estate without having to deal with the hassle of actually buying, maintaining and selling property yourself. If you think they might be right for you, read on. My guide will help you learn more.
The Armchair Millionaire's Guide to REITs
THE BOTTOM LINE: While it's true that REITs had a banner year in 2003, they should still only be considered as one part of a common sense portfolio. Just as you shouldn't chase a hot stock, neither should you buy REITs just because they've enjoyed great returns lately.