Why invest in property?

All investors should care about diversification because it offers the opportunity to reduce the risks in any investment portfolio. Investing in a single asset, or assets, within a single asset class - putting all your money into equities, for example - means the returns you'll receive are wholly dependent upon the investment performance of that asset or asset class.

If performance is poor, your returns will suffer. Diversifying your investments across multiple assets in different asset classes means your returns are dependent upon the investment performance of several different asset classes. If the performance of these asset classes is not correlated, it is likely that when any one asset class is performing poorly, others could be performing well. This results in a smoother and more predictable overall return from your investment portfolio.

Diversification also assists the investor in matching the risk profile of an investment portfolio to their own appetite for risk, by allocating their portfolio in different proportions across asset classes with different performances.

Of course, it is vital that investors seek expert and professional advice to identify how best to match investment objectives to likely performance and appetite for risk.

Further information

To get financial advice you can find an adviser

The inclusion of property into an investment portfolio will increase the diversification of the portfolio because returns from property have low correlation to the returns from other asset classes.  The extent of the diversification will depend on the allocation of assets within the portfolio and the type of property and other assets held.