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This Cheap, Simple Investment Can Fund Your RetirementBy
Thursday, November 1, 2012
Despite everything I've written over the past few years, I don't think most people understand just how extraordinary the opportunity in real estate is...
So let me show you, by sharing a few charts courtesy of my True Wealth Systems databases. If you're interested in safe investment income that can fund your retirement, you have to see these charts...
You see, you must realize that Ben Bernanke and the Federal Reserve are offering you an incredible deal. You must also realize that the housing bust is OVER...
This first chart shows how you can take advantage of Bernanke...
It shows you how low mortgage rates are in the U.S. today. They are artificially low, thanks to Bernanke. In fact, they're cheaper than they have ever been in U.S. history. Take a look:
.png) As I write, you can get a 30-year mortgage at 3.5% interest. A 15-year mortgage is under 3% interest. When you take inflation into account, those rates are ridiculous! As I said, mortgage rates are artificially low thanks to Bernanke. It won't last forever. Take advantage of it.
Meanwhile, we are coming off an extraordinary moment. Housing prices in America have fallen more now than at any time in our lifetimes. Prices in some major cities fell nearly in half, peak to trough. It's been crazy. Most importantly...
The bust in housing prices is over!
The next chart from True Wealth Systems shows it:
 Housing prices have fallen so far recently, they bottomed out at late-1970s prices (when you take inflation into account).
However, that chart is missing one crucial thing... It doesn't take into account the size of a typical home. The size of a home today is dramatically larger than it was in the 1970s.
 So when you factor in home size, houses are the cheapest they have been in generations. Take a look:
 Again, you have to realize that the housing bust is OVER.
Since housing prices typically rise slowly, you have time to get in. You haven't missed a thing. If anything, now is the right time... because you are not trying to "catch a falling knife." The bottom is clear. It is behind us. You're investing safely by buying now.
You might not want to be a landlord... But hey, there are a lot of things in life that you don't really want to do, but you have to do. Being a landlord is the difference between beating Bernanke and being a victim of his zero-percent interest-rate policies.
You essentially have no choices available today when it comes to "traditional" income investments... Cash in the bank pays nothing. CDs pay less than 1%. Bonds and annuities pay less than 2%. These traditional income investments are just terrible.
Even worse, the interest rates don't even keep up with inflation. Said another way, you are losing money every year as the purchasing power of your dollars goes down.
And it's only going to get worse... Our government (regardless of who wins the presidential election) is sure to ring up trillions more dollars of debt in the coming years. It will have to "print" money to pay for those debts, lowering the value of your dollars in the bank even more.
Meanwhile...
Rental income is GREAT now, relative to any other investment.
Even better, you have built-in inflation protection. Both rents and real estate prices tend to rise a bit faster than the rate of inflation. Your money in the bank doesn't have this inflation-protection benefit.
Mortgage rates are at record-lows, so housing is more affordable than ever.
You have a choice today.
You can be a victim of Bernanke's zero-percent interest-rate policy... or you can take advantage of it.
The best way to take advantage is in real estate.
Good investing,
Steve
Market NotesWHERE MONEY GOES TO DIE This week, we noted terrible performance of the clean energy fund (PBW). Over the past two years, this fund – which we often warn investors on – has lost 59% of its value.
But don't write off another fund we often warn folks on. It's still giving PBW a run for its money as the "world's worst investment fund."
In the past five years, there's been a huge increase in the number of "one click" trading vehicles that allow folks to invest in individual commodities and broad market sectors. One such vehicle is UNG, a fund that claims to give investors a way to own natural gas. It has attracted billions in investor cash. It has also attracted scorn from us... because UNG's structure causes it to "bleed" value over time.
For a picture of this bleeding, we look at the two-year performance of UNG (the blue line) plotted with the common measure of long-term natural gas prices (the black line). As you can see, natural gas itself has waffled to a flat performance... while UNG has lost around 50%. Our warning stands: Avoid UNG. It's where money goes to die.
– Brian Hunt
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