Reviews on Real Estate Investment Trusts and Mutual Funds
Jeffrey Maseko
The advantage to the investor in the REIT is the source of income it provides. Specifically, due to the structure of the REIT it does not accrue corporate tax, instead it returns all of the taxable income to investors. The investor receives a 1099 form for tax purposes and it is therefore taxed like additional income.
It should also be remembered that REITs are available for nearly all of the world real estate markets. In many parts of the world, China, Asia, Europe and Dubai the real estate market in both commercial and residential income property is sizzling. There is stability in these parts of the world for some hefty returns for investors.
The overall purpose of the REIT envisioned by the U.S. Congress was to provide a means for investors and in turn the developers of real estate to mutually benefit from growth. It places the average investor in a position of being a big player with the benefit of a share of the profits. A small investment in a REIT can enhance a portfolio of stocks and bonds. Each investment dollar goes into enhancing or creating the availability of funds for building realty.
Know your mutual funds
It is important for the individual investor to know about Mutual Funds. For some people the decision to invest in Mutual Funds is based on the premise that it is low risk investing. By in large this may be true, but it depends on the Mutual Fund and in particular the fund manager.
Some investors own single equities and Mutual Funds along with other investments in their portfolio. Most brokerage houses have financial planners who can review all of your investments including realty, equities, bonds and Mutual Funds to give you a full picture of your financial health and goals for your investing.
There are some excellent advisory services that provide star ratings on various Mutual Funds. The Morningstar advisors have up to date information on the health of various funds. There are also articles in the Wall Street Journal and Investors Daily about Mutual Fund Managers. There are stars in the Mutual Fund field. The star manager is only as good as his or her last year earnings. It is important to know who is doing well currently before you invest.
There are several families of Mutual Funds I would recommend reviewing. The Vanguard Funds, Fidelity, Oppenheimer and American Mutual Funds. Within these family of Mutual Funds there is a fund for about any level of interest and risk level. The information is available on-line or by mail.
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