Abstract
This paper examines the decision of individual investors to allocate a portion of their existing investment portfolios to REITs. It first derives the risk preferences of investors represented by their benchmark portfolios of stocks and bonds. Such risk preferences are then used for portfolio decisions regarding REITs. The analysis shows that investors with lower risk aversion tend to have a more substantial stock component in their benchmark portfolio and will obtain higher risk-return benefits from adding REITs. In addition to the theoretical analysis, the paper provides a practical solution to evaluate the benefit of investing in REITs.
| Original language | American English |
|---|---|
| Title of host publication | Financial Services Review |
| Publisher | Academy of Financial Services |
| Pages | 55-66 |
| Number of pages | 12 |
| Volume | 29 |
| Edition | 1 |
| DOIs | |
| State | Published - Mar 20 2021 |
| Event | Academy of Financial Services (AFS) Annual Meeting - Virtual Duration: Sep 30 2020 → Oct 2 2020 |
Conference
| Conference | Academy of Financial Services (AFS) Annual Meeting |
|---|---|
| Abbreviated title | AFS |
| Period | 9/30/20 → 10/2/20 |
Bibliographical note
Paper was presented at the Academy of Financial Services (AFS) Annual Meeting, which was held virtually from Sept. 30, 2020 to Oct. 2, 2020.The article was published in the Financial Services Review in Spring 2021.