Farley: Five REITs With Solid Foundations

It's still risky to place aggressive bets on a recovery in the residential- and commercial-building segments, but one related group is perking up nicely this summer. Real Estate Investment Trusts (REITs) have come off deep lows in recent months, with many grinding out bullish basing patterns and setting up for major breakouts later this year.

As we know, this was an extremely hot group during the real-estate bubble. It turned south along with construction stocks in early 2007, but has held up much better in the last year-and-a-half. This resilience is paying off now, with capital reentering the sector at a healthy pace in hopes the dark days has finally past.

The great variety of REITs makes them an attractive choice for investors seeking exposure to this bear-market group, but also wanting to avoid the most dangerous segments, like residential construction. The hefty dividends commonly paid by these issues also help to alleviate the anxiety of ownership. ...