|August 20, 2009|
First of all, a thousand apologies for getting this out to you so late today.
As you know, we are working furiously to upgrade all the IDE services and that begins with this e-letter. Yesterday, Michael Masterson announced that nothing could leave the building without its going through both my and his desk. That slowed things down a bit because we are both pretty tough editors.
You have to hand it to the real estate industry. They must be some of the most optimistic people on the face of the earth.
Last July, in the middle of one of the worst housing markets in history, the National Association of Realtors said that they expected home prices to fall only 6% in 2008. This year they said home values will rise by 4.3%.
But that doesn't mean you can't make money in real estate today.
Michael Masterson, consulting editor of Investor's Daily Edge owns tens of millions of dollars in real estate. He stopped buying (and told his readers to stop buying) in 2007. Now he's buying again.
Speaking of real estate, the latest government bailout program has a real-estate component that you should pay close attention to. If passed, it will definitely change your life.
It will change your life even if you don't want it to. IDE is here to announce that our government will being bringing something new and exciting into your neighborhood.
Even more terrifying however, is that part of the money would be used for the "purchase of foreclosed homes that can be refurbished and rented to low- and moderate-income families at affordable rates."
You read that correctly. Government sponsored Section 8 housing may be coming to your own, tranquil neighborhood very soon. One has to wonder what this will to do your property values.
On the bright side, however, no more long car rides to the inner city to score your next nickel bag. It will be just an easy stroll down the block.
The SEC and FINRA are finally admitting what we told you months ago…
We've been warning IDE readers about leveraged ETF's months. Finally, the SEC and the Financial Industry Regulatory Authority (FINRA) have jumped on the bandwagon.
Here's the problem with leveraged ETF's…
Let's assume that you expected the financial sector to fall in 2008. That would have been a great bet. Financial companies performed horribly last year. The Dow Jones U.S. Financials Index (DJUSFN) was down 51%.
Leveraged ETFs can be very powerful and profitable tools if you use them properly.
At IDE we are not opposed to leveraging ETFs. But only if you know what you are doing. And most of the so-called investment experts out there touting them today are either severely naïve or outright bandits.
If you are a conservative investor looking for higher-than-market results, don't even think about leveraged ETFs. Consider corporate bonds instead. The reasons are very clear…
- They have a 99.7% success rate
So why did Steve McDonald issue recommendations to sell nine different bonds this week?
"We are doing great," he says. "We've seen returns as high as 55% and 78% in these boring, super-safe bonds."
If you listen to the financial media, the last place you might consider investing is in the car companies. But according to Andrew Gordon, that's becoming a very attractive market for savvy, contrarian investors.
When it comes to cars, all you hear about are falling demand, overcapacity, rising gas prices and the stupid, government-appointed car czar. "But that's the time to buy," Andy says. "When people are focused on all the bad stuff happening in the industry.
"If I were actively investing in the industry right now," he said, "I'd be looking at Japanese auto companies." They have so many advantages. They are simply the safest bet."
Andrew is currently studying the Japanese manufacturers as a possible recommendation to his readers and we will keep you informed of the outcome.
Investor's Daily Edge
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