In my experience, many retirees like to invests in REITs. Some of the reasons many retirees invests in REITs are:

1. They tell me that REITs are safer because underlying is backed by properties.
2. REITs are safer because of rental income which is easy to understand.
3. Even if the REITs' prices drop, it is ok because the investor still get an income and as long as they don't sell it, the capital lost is just paper lost.

But what they don't realised is that it has a volatility that could be even higher than stocks! For instance, as at 2 August 2013, the volatility of the FTSE Singapore Real Estate Investment Trusts Index is 18.47% compared to FTSE Singapore Index at 13.30%. Volatility is defined as the 3 months weekly standard deviation. Since ...