REITs beat 2006 glum outlook, surprise analysts

Not all stock analysts' predictions hit the nail on the head.  Grumpy Editor noted the February, 2006 issue of Kiplinger's magazine had an item in the Investing section labeled:  Dim Outlook.  It reported Banc of America Securities predicted shares of real estate investment trusts (REITs) "will sink in 2006 and that the group will deliver a total return of zero."

Turns out that REITs were one of 2006's bright spots, with an average return of 30 percent this year.  Diya Gullapalli, in a Tuesday story in The Wall Street Journal, points out real estate funds "are now the best performing U.S. stock category for several performance periods, including one year and five years."

REITs are tax-advantaged companies that own, and in most cases, operate income-producing real estate such as shopping centers, offices, hotels, medical facilities, apartments and warehouses.  They pass most profits to shareholders through dividends.