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That being the case, why am I even bothering to mention REITs now? First, though one may occasionally call it right in the short-term, trying to time the markets perfectly, getting all in or out of them based on what one thinks they will do, is seldom an effective way to invest. Instead, some prefer to keep a certain percentage of their assets in liquid real estate assets at all times, as a way of better allocating their portfolios and so limiting overall risk. REITs usually do not go up or down right in synch with stocks. And, as mentioned, they tend to provide higher income. With foreclosures going up, more homes on the market, less consumer spending and so greater pressure on commercial real estate as well, real estate is no doubt going to be getting cheaper for awhile. This will be an opportunity for the better run REITs to buy more properties cheaply. In addition, given how much greater government debt levels are than only a couple years ago, there is concern about inflation just over the horizon, and REITs often perform well in an inflationary environment.
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