Each year from 2000 through 2005, real estate investment trusts (companies that invest in commercial and residential property) delivered market-beating returns. After performing so impressively for so long, it wouldn't have been a huge surprise if REITs took a breather in '06. So how did they do? They merely crushed the market, returning 30% in the year's first ten months.
Obviously, this kind of performance can't continue indefinitely. REIT values have reached lofty heights. Yields, averaging 4% for property-owning REITs, are roughly half the historic average. The coming year won't be a bad one for REITs, but don't expect anything like '06. Figure on total returns of 7% to 9% in 2007 as investors digest their earlier gains and focus on whether commercial-property values will continue to ascend as the economy softens.
| Row 0 - Cell 0 | Where to Invest in 2007 |
| Row 1 - Cell 0 | Eight Stocks to Own in 2007 |
| Row 2 - Cell 0 | The Three Best International Funds |
| Row 3 - Cell 0 | Investing Wild Cards |
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