Is it suitable for retail investors to buy reits?

Real estate investment trust fund, also known as real estate investment trust fund, has attracted wide attention in China market in recent years. As a fund product based on real estate, REITs mainly obtain long-term stable income by purchasing real estate or securities products based on real estate, and pay dividends to investors. Especially for retail investors, REITs seem to be an ideal asset allocation choice. However, are retail investors suitable for buying REITs? This is a problem that needs to be considered in many aspects. Let's analyze it from different angles.

I. Risks

Compared with other types of funds, REITs are less volatile and less risky. But the underlying asset of REITs is real estate, which also means that it will be affected by economic cycle, policy environment and real estate market. For example, if the real estate market declines, the real estate rental income and dividend payment in REITs will be affected. In addition, REITs also face liquidity risk. Due to the particularity of REITs, their liquidity is generally poor, and if investors are eager to redeem them, they may have to pay higher costs.

Second, the investment income

Judging from the historical data, REITs performed well. Especially on a global scale, the return of REITs is close to that of stocks and much higher than that of bonds and money markets. But as far as China market is concerned, the returns of REITs are closely related to fund managers and market environment. According to the income of different asset types, REITs investment is mainly divided into two categories: one focuses on combing the company's fundamentals, and the other pays more attention to property operation management. Generally speaking, because REITs manage a single type of real estate, its future investment income is relatively limited.

Third, investment opportunities.

REITs need to invest according to market forecast and economic cycle, which requires investors to have certain market analysis ability. If the choice is wrong, once the market is in turmoil, it may cause great losses to assets. Therefore, REITs investment should be based on rational analysis and long-term asset allocation strategy, rather than just relying on the pursuit of prospects.

To sum up, REITs, as an investment fund, have the advantages of relatively low risk and long-term stability. However, if retail investors want to master the skills of REITs investment, they need to have stable asset allocation, certain market analysis ability and bear corresponding risks. For ordinary retail investors, it is necessary to understand and carefully choose the investment direction represented by different products from various aspects, and invest carefully in order to obtain ideal returns.