INDS - VNQ: 3 Key Risks Facing REITs In 2021 (And How To Avoid Them)

• The recent volatility spike indicates that financial markets may be headed for sharp repricing as liquidity conditions shift.
• Investments with real physical ownership provide better defense against inflation and liquidity conditions.
• REITs are a decent inflation hedge, but the popular VNQ owns many with high exposure to the riskiest segments of the real estate market.
• Key risks include rising mortgage rates, long-term deurbanization, and rising capitalization rates.
• Investors should look to the "blue collar economy" such as land-owning and industrial REITs in order to mitigate these risks.

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