Filed under: Newsletters, Stocks to Buy, Housing
Market weakness has come as no surprise to Doug Fabian, as his ETF Trader was holding short positions in sector ETFs focused on such areas as financials and China before the market entered its recent tailspin.
Now, after covering his successful short positions, the advisor is taking another position contrary to the general market consensus: he is recommending a long position in the out-of-favor real estate sector. His latest purchase is iShares Dow Jones U.S. Real Estate (NYSE: IYR).
“We are now suggesting a bit of a ‘bottom fishing’ investment, meaning that we’re seeking returns associated with a swift bounce in a severely beaten-down sector. That sector is real estate, and the fund I want you to buy as soon as you read this is the iShares Dow Jones U.S. Real Estate.
“In the chart here of IYR, we can see that the sector is trading way below both its short-term, 50-day moving average, and the long-term, 200-day moving average. But what got me interested in IYR this day is that despite the overall market weakness, IYR is trading substantially higher.
“The surprise 75-basis-point interest rate cut by the Federal Reserve caused tons of volatility, but both financial stocks and real estate stocks are finally coming to life. I think it is possible we’ve seen a bottoming in real estate shares. And if that turns out to be the case, we’ll see a very nice surge in the value of IYR. Playing the bounce off the bottom is what our bottom fishing strategy in IYR is all about.”
Each day, Steven Halpern’s TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation’s leading financial newsletter advisors.
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