The Role of REIT Preferred and Common Stock in Diversified Portfolios

dc.contributor.authorBoudry, Walter I.
dc.contributor.authordeRoos, Jan A.
dc.contributor.authorUkhov, Andrey D.
dc.description.abstractWhile “maximizing returns” is a stated goal of many investors, it is clear that some are more willing than others to embrace risk in their pursuit of those returns. An analysis of risk-return profiles finds that investors see different purposes for real estate investment trust (REIT) common stock and preferred stock depending on their tolerance for risk. Using a utility-based approach and imposing realistic constraints on the investor’s portfolio, this report shows that REIT preferred and common stock provide diversification benefits, but to different sets of investors. Risk tolerant investors find REIT common stock beneficial, while risk averse investors find the preferred stock more favorable. The key highlight from the study is that investors, especially those who have investment grade bonds, should consider adding REIT preferred stock to their portfolios.
dc.description.legacydownloadsBoudry_2016_Role_of_REIT.pdf: 415 downloads, before Aug. 1, 2020.
dc.rightsRequired Publisher Statement: © Cornell University. Reprinted with permission. All rights reserved.
dc.subjectportfolio weights
dc.subjectrisk tolerance
dc.subjectpreferred stock
dc.subjectcommon stock
dc.subjectreal estate investment trust (REIT)
dc.subjectCornell University
dc.titleThe Role of REIT Preferred and Common Stock in Diversified Portfolios
local.authorAffiliationBoudry, Walter I.: Cornell University School of Hotel Administration
local.authorAffiliationdeRoos, Jan A.: Cornell University School of Hotel Administration
local.authorAffiliationUkhov, Andrey D.: Cornell University School of Hotel Administration


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