How To Own The World, Part I

I haven't posted much about the COVID world because, frankly, it is overwhelming. Hundreds of thousands dead, millions infected, lockdowns ongoing, economies teetering or skyrocketing on the words of government agencies or private investors. As I write, my podunk rural county leads the state of Georgia in resurgence of transmission of the virus and PEOPLE ARE STILL GOING AROUND MASKLESS. I know, it's all about "muh rights" or whatever, but what about your responsibilities to others and society as a whole? Common courtesy? Human decency?

Enough of the rant. Let's talk about investing in a "this is not investment or financial advice and is not meant to be taken as such" kind of way. Today's topic: real estate investment trusts.

A Real Estate Investment Trust, or REIT for short, is a trust that owns and operates commercial real estate, such as housing, apartment complexes, malls and shopping centers, industrial parks, storage, even cell towers. A Mortgage REIT (mREIT) generates mortgages and finance-side aspects of the property market. The REIT market, like pretty much everything else, took a massive hit in March 2020 and has been slow to recover. This presents an opportunity.

I like Vanguard funds and thus own their two offerings of REITs, the Vanguard Real Estate Index Fund

(VNQ) and Vanguard Global ex-US Real Estate Index (VNQ.I). Both are Exchange Traded Funds, meaning they invest in numerous REITs and are traded on exchanges like a normal stock. The difference between the two is simple: VNQ is US-specific in its holdings, while VNQ.I holds interest in REITs from other nations in the developed world. Both pay a dividend and have very low expense ratios.

REITs offer the ability to gain exposure to real estate without having to own and maintain physical property yourself. Once share of each will cost you about $140 USD at the time of this writing; that's a lot cheaper than a house or other property. Better still, you don't have to unclog a toilet or mow a lawn.

Is an REIT right for you? Do your due diligence and find out. There are numerous REITs to look into, both individual Trusts and Funds. Dig in and choose wisely.

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