WHEN INFLATION-indexed bonds first appeared in the 1990s, they were hailed as a smart way to protect your nest egg. The bonds are pegged to the consumer price index (CPI), which means that as inflation rises so does the principal value of the bonds. But Treasury Inflation-Protected Securities (TIPS) have been disappointing.

CHINA AND India are booming, but investors shouldn’t overlook Japan. After years of stagnation, the country’s gross domestic product is expanding at an annual rate of 5%, roughly twice the U.S. growth rate, and corporate earnings are climbing a healthy 10%. “The outlook for Japanese stocks is bright,” says David Ishibashi, portfolio manager of Matthews Japan Fund.

For decades, banks managing pensions and other institutions have practiced “social investing,” picking stocks in companies that meet ethical criteria. In the 1970s, some public pensions shunned IBM because the company did business in apartheid-era South Africa. Since then, some church endowments have steered away from companies that produce alcohol or pornography. In recent years, many “social” mutual funds have appeared. Morningstar, a fund analysis company, follows 101 funds that use social criteria of some kind. The list includes portfolios aimed at Catholics, Muslims, union members, and environmentalists.

More and more companies are buying back their own stock. In recent months, Caterpillar announced a $7.5 billion buyback, while Xerox said that it would purchase $500 million worth of its shares.

HEDGE FUNDS often score huge gains by taking big risks and investing in ways mutual funds are not allowed to. And unlike mutual funds, which advertise, hedge funds usually add new clients only through word-of-mouth referrals.

Domestic stocks have done well recently, but foreign stocks have soared. During the five years ending in October 2006, the average international stock fund returned 15.61% annually, about 8 percentage points ahead of the Standard Poor’s 500-stock index.

INVESTORS HAVE good reason to be pleased. During the first 10 months of 2006, the Standard Poor’s 500-stock index returned 12.1%. But along with those gains comes an inevitable cloud: taxes.

VARIABLE ANNUITIES and mutual funds have long invested in similar holdings. Both own port-folios of stocks and bonds, rewarding investors with whatever returns the holdings deliver. But there are important differences between the two types of investments.

REAL ESTATE investments of all kinds have soared. During the five years ending on September 30, the average real estate mutual fund returned 21.9% annually. Now, however, housing sales are slipping, and some analysts say that prices of office buildings and shopping centers may be peaking.

During the bull market that ended in 2000, investors learned that stocks can deliver big returns—and sudden losses. Since then, there has been a new spirit of caution, and funds that once seemed stodgy have enjoyed renewed demand. These include balanced funds, which typically hold a mix of blue-chip stocks and relatively safe bonds.