VNQ - You Don't Have to Pick a Winner In REITs. Here's Why.
2023-07-01 07:09:00 ET
Buying individual stocks is time-consuming, and some investors may not want to (or be able to) put in the effort, at least not across every sector of the market. That's why you might want to consider taking a different approach with some niche areas, like real estate investment trusts (REITs). REITs are known for offering high yields, but they are a bit unique and need to be looked at differently than many other sectors. This is why you might want to buy the Vanguard Real Estate Index ETF (NYSEMKT: VNQ) or Cohen & Steers Quality Realty Income Fund (NYSE: RQI) .
You can clearly go out and look through the hundreds of REITs and try to pick one or a few for your portfolio. That's the traditional approach to investing, with longtime dividend-paying companies like Realty Income (NYSE: O) , Federal Realty (NYSE: FRT) , and Avalonbay (NYSE: AVB) all great starting points. But there are some important differences between even these three, with Realty Income a net lease REIT, Federal Realty a strip mall and mixed use landlord, and Avalonbay focused on apartments. Yes, they are all REITs, but the sectors in which they operate are quite different.
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You Don't Have to Pick a Winner In REITs. Here's Why.