Realty Income: New York Stock Exchange Symbol 'O'

Realty Income Investing Risks

Let's Talk About Risk

We believe it's as important to talk about the risks of owning Realty Income shares as it is to tell you about the benefits of receiving monthly dividends from us. That's why we've taken the time to produce a video, to provide a snapshot of what we think investors should consider before investing and to offer you some additional food for thought in the content that follows.

One last thing, the legal discussion of most of the risks associated with owning our shares are set forth in the reading at the bottom of this page, which is taken directly from our documents filed with the SEC.

Points to Consider

Here are some points about risk in general, along with a few more specific points about Realty Income investment risk.

What are some of the risks of investing for income?

  • You could lose some or all of the money that you invest
  • You might not realize the benefits you thought you might receive from investing
  • The savings you invested in order to generate income may not provide the income that you need
  • The dividends that you thought you would get might be cut or discontinued

These are just a few of the risks that are associated with investing for income. The point is that risks exist when investing for income just as when you invest for any other objective.

How might I think about risk?

  • We believe that all investors should take the time to figure out how they feel about risk.
  • What seems risky to one person may not seem risky to another, so it's important to know what your expectations are and how much risk you are willing to take to make money. You might measure this according to what is likely to keep you awake at night.
  • Risk can be considered according to:
    • Investment type — stocks, bonds, government securities, money market accounts, etc.
      Each of these investments has risks that are specifically associated with how they work. For example: dividend income from stocks has different risks from interest income generated by bonds.
    • Life stage — where one is in life relative to the ability to recoup any losses that might be sustained
    • Type of funds used to invest — life savings, dedicated investment dollars or pension/retirement funds

Inherent in thinking about risk is how much you know about investing in general. The less knowledge about investments, the greater the risk that an improper or risky investment decision will be made.

What are some of the risks of owning Realty Income?

Most of the risks of owning our shares are discussed in the "Risk Factors" section of our Annual Report on Form 10-K and in subsequent udpates provided in our 10-Q and 8-K SEC filings. We strongly suggest that you read the Risk section. Here are a couple of the main points:

  • There is risk that the price you paid for our shares could go down and you might lose some or all of your original investment
  • There is risk associated with owning real estate that relies on lease payments from our tenants to support dividend payments
  • There is risk that dividends will not always increase, that dividends will not be declared according to past history, or that dividends will be declared at all

The point is that investors do take on risk when they become a Realty Income shareowner, so it is imperative that we tell you about these risks and that you carefully consider whether you're willing to live with these risks.

How might I get comfortable with risk?

  • Learn as much as possible about an investment before making an investment decision
  • Analyze the amount of risk relative to the return available for various types of investments and then decide what is acceptable and make investments accordingly
  • Manage risk to some degree by diversifying investments
    • Diversification simply means spreading investment dollars across a number of different investment types, industries or companies with a goal of minimizing the losses that might occur when investing in a single type of investment, industry or company. This is similar to the idea of not putting all of your eggs in one basket.
  • Discuss any or all investments with a qualified financial advisor before making an investment decision

There are some people who never do get comfortable with risking their savings and that's okay. However, these people should not invest in Realty Income or any other investment where they can lose any part of their savings.