You can decide if indirect investing is the right choice for you after examining the following features.
The advantages associated with investing in property shares is that investors gain from greater liquidity since property company shares are publicly traded and the time taken to buy and sell these shares is far shorter than the time taken to buy and sell real property.
The shareholder has little influence over the acquistion and disposal decisions made by the company, nor overfinancing decisons (the amount of borrowing -gearing or leverage – and the issuing of new shares which dilute the value of existing shares).
Since share prices should reflect judgements about the quality of management, the equity markets provides some form of discipline.
Another disadvantage is the charges involved in buying into property shares, trusts and funds.
Investment companies do not provide the high quality portfolio management services for free.
There are many uncontrollable variables involved and then there is always a chance of unpredictable happening, normally referred to as “the great unknown”.
Mutual funds can be divided into different categories on basis of risk, for example “hybrid fund” being less risky while “specialized stock funds” falling in the high risk – high return category.
Some part of this expense is also charged from investors, known as sales load.
In addition, another disadvantage is the lack of control that the investor has in guiding their investments.