In this world where your fixed deposit rates are close to zero percent, it is easy to reach for REITs and business trust yielding more than that. Recent IPO of Ascendas hospitality trust and  outperformance of almost all REITs may have been the direct result of this. There are a few things to take note when reaching for higher yielding instrument.

Yield is to compensate for the Risk borne

In finance, you often hear risk versus reward. If you put in a larger amount of risk, you should demand more reward. Many like these REIT because they have yields from 4%-8%.  They are far higher than your fixed deposit and money market. However, the chances of you losing a large portion of your capital is far higher compare to fixed deposit. Always remember that. You have to learn to value the risk borne when you exchange your cash for ......