Best of the Week
Most Popular
1.SNP Offers Labour Deadly Death Embrace Alliance, Holding England to Ransom, Destroy UK From Within - Nadeem_Walayat
2.Gold And Silver – Most Widely Used Currency In Western World? Stupidity - Michael_Noonan
3.Election Forecast 2015 - Coalition Economic Recovery vs Labour Collapse - Nadeem_Walayat
4.Election Forecast 2015 - Debates Boost Labour Into Opinion Polls Seats Lead - Nadeem_Walayat
5.Why are Interest Rates So Low? Ben Bernanke, Confused as Ever, Starts His Own Blog to Prove It - Mike_Shedlock
6.Leaders Debate Election 2015 - Natalie Bennett Green Party Convincing Anti-Austerity More Debt Argument - Nadeem_Walayat
7.Labour Economic Collapse vs Coalition Recovery - UK Election Forecast 2015 - Video - Nadeem_Walayat
8.China’s Stock Market Mania; How High can Red-chips Fly? - Gary_Dorsch
9.Gold and Misery, Strange Bedfellows - 31st Mar 15 - Dan_Norcini
10.Ed Miliband Debate Election 2015 Analysis - Labour Spending, Debt and Economic Collapse - Nadeem_Walayat
Last 5 days
Gold Long-term Outlook for Massive Parabolic Run to $5,000 - 4th May 15
Silver Bear Market Downside Momentum Easing - 4th May 15
Silver and NASDAQ – Long, Medium and Short Trends - 4th May 15
Let's Make Silver Shine Even Brighter Than Gold - 4th May 15
Six Silver Questions and Perspectives - 4th May 15
Stock Market Last Hurrah? - 4th May 15 - Andre_Gratian
Stocks – Bulls, Bears, And Pigs : Which Are You? - 4th May 15
The Energy Complex: Very Interesting Chartology - 4th May 15
U.S. Long Bond, an Historic Trading Opportunity? - 4th May 15
This Financial “Seismograph” Signals A Monetary Earthquake - 4th May 15
Nate Silver UK General Election Forecast 2015 as Wrong as 2010? - 4th May 15
U.S. GDP Sucking Spoilt Milk From A Bloated Dead Sow - 3rd May 15
Stocks, Gold and Oil Markets Chopsville - 3rd May 15
UK Election 2015 Forecast - The Most Probable Outcome is... - 3rd May 15
Kate Gives Birth to Coalition Government - 2nd May 15
Stock Market Correction Time? - 2nd May 15
Gold And Silver - Thieving Bankers Operate In Open; Public Have Eyes Wide Shut - 2nd May 15
U.S.A. Caught In Enormous Policy Vise - ZIRP & QE Destructive Influence - 2nd May 15
Crude Oil Price Bear Market Is Over - 2nd May 15
Gold and Silver Bear Squeeze Comes and Goes - 2nd May 15
UK Election Forecast 2015 - Who Will Win? - 1st May 15
Gold Developments Say New Mine Supply Is Peaking - 1st May 15
Emerging Mexican Silver - 1st May 15
Investigating The U.S. GDP Deflator: Wildly Differing Results Depending on Your Choice - 1st May 15
JP Morgan Cornering Silver Bullion Market? - 1st May 15
Baltimore Riots Whose Fault? - 1st May 15
Monetary And Economic Insights From Incrementum’s Advisory Board - 1st May 15
Your Best Stock Investment in the "Cloud" Is Right Here - 1st May 15
Stock Market Kondratieff Waves and the Greater Depression 2013- 2020 update - 1st May 15
How One Chart Is Changing My Outlook on Crude Oil Prices - 1st May 15
The Real Reason Why Obama Wants to Lift Sanctions on Iran - 30th Apr 15
Gold and the New U.S. and UK Recession - ZIRP to Continue - 30th Apr 15
Uranium Price Is About to Rocket - 30th Apr 15
Immigration Crisis Drives a Deep Wedge Between E.U. States - 30th Apr 15
Labour Leads in Nick Clegg's Sheffield Hallam Seat, Latest Ashcroft Opinion Poll - 30th Apr 15
Is the Fed about to Ignite the Stock Market Sell in May and Go Away Trade? - 30th Apr 15
Bill Gross on Pimco Hiring Bernanke and Fed Interest Rate Hike 2015 - 30th Apr 15
The European Stock Markets Trend Is Up. We're In. Are You? - 29th Apr 15
Putin: Czar Of Natural Gas, Crude Oil, Uranium & GOLD - 29th Apr 15
BEA Reports Weak U.S. 1st Quarter 2015 GDP Growth at 0.25% - 29th Apr 15
Why Labour Cannot Win Sheffield Hallam and other Lib-Dem / Conservative Key Marginal Seats - 29th Apr 15
Stocks, Bonds and Real Estate Financial Hurricanes Headed Our Way - No Where to Hide! - 28th Apr 15
Bitcoin Price Counterintuitive Signs - 28th Apr 15
Stock Market Valuations - Maybe I am Crazy - 28th Apr 15
Gold Price Rises, Silver Surges – Physical Demand and Greece, Ukraine, Russia Risks - 28th Apr 15
The Insurance "Game" Has Changed – and Investors Can Profit - 28th Apr 15
Prelude to a Japanese Revival - 28th Apr 15
Why You Could Make ANOTHER 100% in China Stock Market Starting Now - 28th Apr 15
CIA Prefab State Terror for Human Bondage - 28th Apr 15

Free Instant Analysis

Free Instant Technical Analysis


Market Oracle FREE Newsletter

The War on Cash!

Take Advantage of U.S. Housing Market Recovery; Avoid Real Estate and Homebuilders

Housing-Market / US Housing Apr 02, 2013 - 01:32 PM GMT

By: DailyGainsLetter

Housing-Market

John Whitefoot writes: The Dow Jones Industrial Average continues to climb into uncharted territory, trading above 14,500. This is in spite of weak underlying economic indicators. On Main Street, unemployment remains high, consumer confidence is low, and gross domestic product (GDP) remains bleak. On Wall Street, it’s confetti, unicorns, and a raging bull.


But for how much longer? Every four to six years, the U.S. experiences an economic slowdown. It happens like clockwork. The current bull market is now in its fourth year (if you were fortunate enough to even realize we’re in a bull market).

While some investors may be sitting on the sidelines, waiting for a market correction, others are trying to figure out if they should jump in. Thanks to the economic disconnect between the Dow Jones and what the average American is feeling, it’s tough to decide whether investors should stay or go.

In this economic climate, it might be best to think about trading the market—not the economy.

One bright (but fragile) sector that has been performing well is housing (in spite of the fact that housing prices are still down 41% from their 2007 peak). In February, U.S. builders broke ground at a seasonally adjusted annual rate of 917,000. That’s up from 910,000 in January and the second-fastest pace in four-and-a-half years. (Source: “New Residential Construction in February 2013,” U.S. Census Bureau web site, March 19, 2013, last accessed March 28, 2013.)

Is this the shape of things to come? It was also announced that building permits increased 4.6% to 946,000; the most since June 2008, just a few months into the Great Recession.

Where can investors looking to take advantage of the rebounding housing market turn? Lumber and forest product stocks have been on a tear, thanks to the housing recovery. Furthermore, a supply constraint on the heels of sawmill closures during the Great Recession and ongoing demand from Asia means there is still room to run.

Lumber prices have climbed 45% to $385.00 per 1,000 board feet, compared to $265.00 at the end of March last year. Oriented strand board (OSB, or particle board) prices, have doubled to $420.00 per 1,000 square feet from $215.00.

Jacksonville, Florida-based Rayonier, Inc. (NYSE/RYN) is currently trading near $59.00 per share and has seen its share price climb 37.4% year-over-year, up more than 13% year-to-date. The company also provides an annual dividend of three percent. Weyerhaeuser Company (NYSE/WY) is currently trading near $31.00 per share and is up 45% year-over-year and 12% year-to-date. Weyerhaeuser provides an annual dividend yield of 2.2%.

Currently trading near $10.25 per share, International Forest Products Limited (TSX/IFP-A) has seen an increase in its share price of 114% year-over-year and 27% year-to-date. Ainsworth Lumber Co. Ltd. (TSX/ANS) has seen its share price climb more than 175% year-over year and is up 46% year-to-date.

While lumber prices can correct quite sharply, there continues to be a number of great opportunities for investors looking to diversify their retirement portfolio with lumber products while capitalizing on the housing market.

Copyright © 2013 Daily Gains Letter – All Rights Reserved

Bio: The Daily Gains Letter provides independent and unbiased research. Our goal at the Daily Gains Letter is to provide our readership with personal wealth guidance, money management and investment strategies to help our readers make more money from their investments.

© 2005-2015 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in

Free Report - Financial Markets 2014