Posted on 07 June 2012.
While the collapse in real estate prices in the United States from 2005 to 2012 has caused a lot of economic turmoil, it has also created a potentially lucrative investment opportunity for investors willing to invest in financial securities related to the real estate market. With real estate prices showing signs of stabilizing during 2012, it is time for investors to seriously think about how to make money from the housing rebound. From home builders to real estate investment trusts (REITs), many financial securities related to the real estate market are near the bottom of their historical valuations and may provide excellent long term investment opportunities.
Nobody knows exactly when the bottom in real estate prices in the United States will be reached; however, an eventual recovery in real estate prices is bound to occur, and therefore it would be wise for investors to explore ways to make money from the housing rebound. Some of the investments that could make money from the housing rebound have the added benefit that they pay healthy periodic dividends, which provide income to investors while they wait for the housing rebound to take hold and subsequently push up the prices of real estate related dividend paying financial securities they hold.
There are a number of different ways to make money from the housing rebound that include either direct or indirect investments in the housing market. Investors can make money from the housing rebound by buying stocks in companies that make their money directly by building and selling houses or by buying stocks in companies that make their money indirectly by selling products and services that are in high demand during a housing recovery. There is also the option of buying financial securities, such as Exchange Traded Funds (ETFs) that invest in companies (such as home builders, home building material and product suppliers, and home improvement stores) that generate revenue and income from the housing market in various ways.
Leading home builder stocks to make money from the housing rebound include:
Leading home improvement stocks to make money from the housing rebound include:
ETFs to make money from the housing rebound include:
It should be noted that stocks and ETFs that appears cheap can always get cheaper. Any slowdown in the United States economy that causes the tepid housing rebound to stall could cause stocks and ETFs associated with the housing market to fall in value. However, with a growing population and an economy that will eventually find its footing and grow, it is only a matter of time before demand for housing causes a rebound in real estate prices in the United States and sustained increases in revenue and potentially profits for companies involved in the housing market. Investors with a long range investment horizons can position themselves in housing related securities to make money from the housing rebound. More conservative investors may want to make money from the housing rebound by investing in ETFs, since an ETF investment protects the investor from company specific events that could cause a loss in value of their housing rebound investment.
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