Real Estate
In short
Property investments — direct or via REITs — provide income and inflation hedge
Real estate investments include buying property directly or through REITs (Real Estate Investment Trusts) — companies that own properties and pay dividends. Real estate provides rental income, tax benefits, and inflation protection.
Real estate offers rental income, capital appreciation, and inflation protection. REITs (Real Estate Investment Trusts) provide liquid, diversified exposure — required to distribute 90% of income as dividends. REIT sectors: residential, commercial, industrial, data centers, healthcare.
Related concepts
- Alternative Investments — Alternative investments are anything outside stocks, bonds, and cash — real estate, hedge funds, private equity, commodities, and crypto. They often have low correlation to traditional markets, improving portfolio diversification.
- Dividend Yield — If a stock trades at $100 and pays $3 a year in dividends, the yield is 3% — similar to the interest rate on a savings account, but for a stock. Because yield is dividends divided by price, it also rises whenever the stock price falls, even if the dividend itself hasn't grown at all.
- Asset Allocation — Asset allocation is how you divide your money between different types of investments. A classic '60/40' portfolio is 60% stocks, 40% bonds. It's the most important decision in investing — determines most of your long-term returns and risk.
- Fixed Income — Fixed income investments (bonds) lend money to governments or companies and receive regular interest payments. Less exciting than stocks but provide stability and income. When stocks crash, bonds often rise — they're a safety net.