According to Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine Capital, it is time.
“Investors should bet against the SPDR S&P Homebuilders ETF because he does not see the expected rebound in single-family housing occurring”
We like the idea as this ETF is likely to yield about a 50% return on the short side over the next few years. Why? For the following reasons.
- As we have outlined so many times before, the housing recovery is over and the entire real estate market is about to embark on the most vicious bear leg of it’s decline. Stage 3. You can read everything you need to know about this here. Real Estate Collapse 2.0 Why, How & When
- Our advanced mathematical and timing work predicts a severe bear market between 2014-2017. Under such circumstances the real estate market will not be able to maintain its upward trajectory. On the contrary, it might be one of the sectors leading the market lower.
- SPDR S&P Homebuilders ETF (XHB) is showing early signs of a technical price breakdown.
When you combine the points the above, SPDR S&P Homebuilders ETF (XHB) becomes a very good short investment opportunity.
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Is It Time To Short Homebuilders? This Answer Might Surprise You Google
Reuters: DoubleLine’s Gundlach recommends shorting homebuilders ETF
NEW YORK, May 5 (Reuters) – Jeffrey Gundlach, chief executive and chief investment officer of DoubleLine Capital, said on Monday that investors should bet against the SPDR S&P Homebuilders ETF because he does not see the expected rebound in single-family housing occurring.
Gundlach, speaking at the Sohn Investment Conference in New York, said that problems dogging the housing market include expected rises in mortgage rates and the amount of student loan debt carried by young adults, which makes saving for a down payment difficult.
He also said that if mortgage financiers Fannie Mae and Freddie Mac were wound down by the government, mortgage rates would rise.