By the time the average investor wakes up the greatest buying opportunity for real estate stocks in recent (if not modern) history may well be over. There is something powerful and broad based which is driving real estate and related stocks higher. The big real estate ETF IYR is getting closer to pulling back all the losses incurred since the collapse of Lehmans some 12 months ago. Furthermore, IYR is now clearly outperforming the Dow (and the S&P 500).
Could this be just another dead cat bounce for real estate stocks? Given that anything with a real estate/home building connotation is flying right now (take a look at the performance of the Russell 2000 real estate and home building indices) we think that the real estate sector has entered another bullish phase. Obviously this won’t sit well with many fundamentalists who would argue that consumers are still maxed out with respect to credit……but it is happening!
Our wealth creation portfolio is up 19.06% since the beginning of the year with approximately 40% of the volatility of the S&P 500. This portfolio is not leveraged.
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