REITs Seem Like A Risky Bet, Some Experts Say

Financial Markets, Bonds, Stock Market

REITs have been one of the decade’s fastest-growing investments, and while they are still performing well enough, some experts are beginning to think of them as a risky bet.

That’s for two main reasons: first, analysts fear a Fed rate hike would hurt the industry; and second, some experts argue REITs are already overpriced, Fortune reports. Whether or not they are overpriced, the S&P US REIT index has risen an enormous 59% over the past five years.

Because of these cautions, many investors choose to include REITs as only a small part of their portfolio. Research firm Birinyi Associates founder Laszlo Birinyi reminds investors that real estate only makes up 3% of the market cap of the S&P 500, and says he doesn’t consider it a must-have investment. [Fortune]

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