Investing Basics · 4 min read · July 24, 2026

What Are REITs and ETFs, and Are They a Good Investment?

ETFs bundle hundreds of investments into one share; REITs let you own income-producing real estate without being a landlord. What they actually are, how they've performed, and how to use them.

Two terms that show up often in investing conversations are ETFs and REITs. Both can be useful tools, yet they are frequently misunderstood. Understanding what they actually are makes it easier to decide whether they belong in a long-term plan.

An ETF, or exchange-traded fund, is a basket of investments that trades on the stock market like a single stock. One share of an ETF can give you ownership in dozens or even hundreds of companies, bonds, or other assets. Many popular ETFs track broad market indexes, specific sectors, or themes. Because they hold many underlying investments, they offer instant diversification. Costs are usually low, especially for plain index ETFs, and you can buy or sell them throughout the trading day. For beginners, a broad stock market ETF is often one of the simplest ways to own a slice of the overall market without having to pick individual companies.

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