Perhaps the best-known guideline in buying, selling, renting or appraising real estate is "location, location, location." A comparable mantra for investors in general would be "diversification, diversification, diversification." It turns out that giving real estate a place in your overall portfolio is an essential step toward optimal diversification.

In this case, real estate refers to real estate investment trusts, and the performance of REITs predominately represents commercial real estate rather than residential real estate. This is a powerful investment. In fact, as shown in the Seven Core Assets chart on the next page, REITs constitute the best-performing "core" asset class over the past 42 years.

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