Friday, October 26, 2012 - 5:12 AM

Are REITs Safer Than The Typical Stocks?

From USA Today's personal finance Q&A article: Ask Mat: Can REIT values go to $0:

But since REITs are invested in property, there's more protection against the horror show of having shares crash to $0. By law, 75% of a REITs asset must be invested in real estate. The market value of the property owned by the REIT offers a bit of protection, as long as the value of the property doesn't go to zero.

KenBDG5,143 posts since
Nov 29, 2009
Rep Points: 116,995

1. Friday, October 26, 2012 - 9:22 AM

"The Vanguard REIT ETF, for instance, fell 75% from its high in February 2007 to its low in March 2009. That's a huge hit, but if it's any consolation, shares didn't go to zero, they bottomed out at roughly $20 a share."

Well, that's certainly a relief to know. Only a 75% drop.

Shorebreak1,284 posts since
Apr 6, 2010
Rep Points: 4,803