Real estate, for many of us the home we are living in, can and should be considered part of our portfolio. If you own a home it will make your overall portfolio much more stable, less prone to the ups and downs of the markets.
But there is also a more active way to invest in real estate, by owning rental or business properties which will deliver a return not unlike a bond holding.
Of course only very few have enough set aside to actually go and build a office block somewhere off the Bahnhofstrasse in Zürich, but if many investors pull their money together...a classic mutual fund set up, don't you think?
As Real estate moves very much out of synch with the stock markets it often makes a very good diversifier.