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Homebuilder Stock Recommendations
================== Recommendation #1 ================== This recommendation for investing in Homebuilders, comes in the form of an ETF. It is a volatile investment, yet safer than investing in an individual Homebuilder stock. And it does, in my opinion, offer the oppurtunity for triple-digit returns. The ETF I am recommending invests in only seven Homebuilder securities. These seven companies are the stalwarts in the industry who have been around for many years. They construct residential homes, including , manufacturers of mobile and prefabricated homes. Also, they all meet minimum market capitalization and liquidity requirements. The fund lost 52.78% of its value in 2007. Normally, this would be an indication for all investors to run for the hills, but homebuilder stocks are a different animal. This large loss can actually be an indicator that the homebuilding sector is poised for recovery. The average bear market in this sector lasts about 16 months. We are now approaching 32 months. The average historical loss during a bear market is about 50%. We are now looking at an average loss of 68%. The optimism stems from the following. Once the bear market has retreated and the bull market takes over, we can expect sustained growth for about 3 years on average. More importantly, historically these stocks will appreciate by an average of 360%, most of which come early on in the bull market. I believe this ETF is poised for triple-digit returns. Please do your own research. ===================================== ETF: Ishares Dow Jones US Home Const. Symbol: ITB Current Price: $14.51 =====================================
UpdateWhen I first recommended ITB Homebuilders ETF, the share price was sitting at $14.51. It is currently sitting at $20.85, as of February 27, 2008.This is a healthy gain of over 40%. Although I feel this ETF could provide even more generous returns, the recent housing information makes me hesitant to hold onto these shares. Personally, I would sell of my current holdings and take the nice profit. Add ITB Homebuilder ETF to your watch list, and after it retraces, if it does, you will have a very good idea of when to get on board for the next rise. This of course, is only my opinion, please do your own research.
Disclaimer: I am not a registered investment advisor. Everything on this website is my opinion and put her for the enjoyment of my readers. I do not recommend making financial decisions based upon my opinions. I advocate doing your own research and making an informed decision. All information put forth on this website was obtained freely via the internet, radio and television. I do not have any contracts or deals with any financial newsletter of any kind. Income generated from this site is done through advertisements. I will always let my reader know if I hold any position on a recommendation I make. ================================================================= Homebuilder Stocks to Watch |