Property transactions have come to nearly a complete halt. The market has discounted REIT shares to levels that anticipate a drawn-out period of deteriorating fundamentals. They are trading at steep discounts to asset values, even using our reduced estimates of value, historically high dividend yields and low price-to-cash-flow multiples. The single most important factor affecting a recovery will be the course of the economy. Fortunately, in this cycle there hasn't been a great deal of overbuilding, which would have worsened the outlook considerably, as it did in the early 1990s. We expect the record fiscal and monetary stimulation being put in place worldwide to at least stem the economy's decline. We should start seeing evidence of this by the end of 2009, when economic statistics begin to suggest a bottom. REITs tend to be early-cycle stocks, so they could start to perform well sometime between now and then. Meantime, it is hard to imagine valuations getting much worse.

In the last year we have witnessed economic corrections resulting in the folding of a housing market, a credit lockup, a failing financial sector, a recent oil pop, insurance and rating agency scandals, forced redemptions, unseen VIX levels.....etc. etc. etc.

In light of the holiday season, it seems the newest data being watched is that of the retail sector. With knowingly weak and worsening consumer spending numbers, one would be expected to question the stability of an already weakening commercial real estate market.

There are a huge number of stocks, including closed end funds, real estate trusts, master limited partnerships, and oil royalty trusts, which pay their dividends monthly. The advantages of receiving monthly dividends are several:

1. They accelerate the investors' return of capital.
2. They compound faster than quarterly dividend stocks when reinvested.
3. They provide a steadier cash flow for retirees on a fixed income who required a consistent monthly income.
4. The stream of income helps reduce volatility.
5. Some of these monthly dividend stocks have yields that are partially or wholly tax free.

According to WallStreetNewsNetwork.com, there are 323 different stocks which pay their dividends on a monthly basis, with yields from half a percent to almost 50%. Be careful, as many of these yields are extremely high and those dividends may not be sustainable.

Top 10 Most VIX-Correlated ETFs and CEFs Over the Past Week and Month

Week
A majority of these funds are municipal funds from BlackRock and Nuveen (NKO, NXK, BKK, NGB, RNJ), with the rest being comprised of other bond/income trusts and short funds.

Lately I have been learning about, and warming up to the idea of adding a little bit of of international real estate, probably not RAP however, to client portfolios.

I am trying to learn about the various products out there. Alpine has a CEF (AWP) and an OEF [EGLRX]. StateStreet has the SPDR DJ Wilshire Intl Real Estate ETF (RWX). There is the ING Clarion Global Real Estate Fund (IGR), Cohen & Steers Worldwide Realty Income (RWF) and WisdomTree has an ETF (DRW) that came out on Tuesday, and could yield in the mid-threes or higher.

Excerpt from Raymond James strategist Jeffrey Saut's latest essay:

...the Federal Reserve “follows” the bond market when setting the Fed Funds interest rate rather than “leading” it. If that historical precedent holds true, it suggests the Fed is unlikely to lower interest rates anytime soon. Ladies and gentlemen, to a Wall Street community imbibed with lower interest rates, steady interest rates -- or worse yet higher interest rates -- would be a shock. Not only would higher interest rates have negative implication for the economy, but for our stock market regression models, P/E ratios, and our weaker U.S. dollar strategy. So what are we to do?

Many income investors are looking for monthly dividend payments to support their income during retirement. Other pre-retirement investors want monthly dividend stocks for their IRAs for faster compounding.

This list is now up to 150 different stocks, CEFs, REITs, floating rate funds, and oil income funds [such as Canadian royalty trusts], all of which are traded on the New York Stock Exchange or the American Stock Exchange. I've added over twenty new securities since the year-end update, reposted the yields, kept the readers' recommendations of sorting by yield with the highest first, and identifying the Canadian companies [due to tax withholding issues].

Due to requests from readers, I have sorted the list by yield, from highest to lowest. In addition, I have identified the Canadian trusts due to the tax withholding issue which can significantly affect the yield, especially with regard to holding these Canadian Oil Income Trusts in retirement plans (they all trade in the U.S.). The list shows the name of the stock, the stock market symbol, the yield, and if the stock is Canadian.

1. Aberdeen Asia-Pacific Income Fund Inc. (FAX) 6.6%