THE “800 POUND GORILLA” IN THE U.S. ECONOMY

What do the following segments of our economy have in common?

(1)   New Home Builders

(2)   Construction Companies & Services

(3)   Mortgage Finance Companies

(4)   General Contractors

(5)   Construction Supplies & Fixtures

(6)   Raw Materials

(7)   Home furnishing & Appliances

(8)   Retail Companies

These segments of our economy all rise and fall along with the U.S. Housing Market. With the housing market finally experience recovery, expect economic growth this year of .5% which is directly attributed to the improvement in the housing market.  It is no wonder that many economists consider housing to be a main driver of our national economic “engine”.

How does this relate to your investment strategy? Do you think the large gains experienced recently by stocks and bonds is sustainable? Don’t bet on it.  The stock market is being buoyed by worldwide quantitative easing.  Meanwhile, with the recovery of the housing market, expect a resumption of the long term appreciation in housing of 3%-5%. Not only should you be a homeowner, but you should have real estate in your investment portfolio. Check out the following article in “HousingWire” for more details click here, and don’t forget to call The Zwahlen team when you are looking to buy or sell real estate.