OUTLOOK

"Bullish on the Real Estate Sector"

12/18/2007

We are bullish on the Real Estate sector and expect the Dow Jones Wilshire REIT Index to rally to 210 or more from its close of 203.50 on 12/17/07.  We expect this rally to occur within the next 4 weeks.

Our system is indicating extremes in negative sentiment in the Real Estate sector.  Given the subprime fallout and the collapsing housing market, the Dow Jones Wilshire REIT Index has been the worst performing of all Dow Jones Wilshire Indexes.  As of 12/18/07, its YTD return was -21.8%.  Rather than fleeing the sector, we believe this is a good buying opportunity, given the sector's favorable valuations and high dividend yield relative to bonds.

Mark Yuan, CFA