Today I'll give you one way to profit from the Real Estate Meltdown.

Here's a topic that really hits home.  So much so, that you may even have felt turned off by the subject-line of the email.  But it's not just the real estate market that's falling apart; families are falling apart, as well.  What do I mean?

Well, meet Bob Smith.  Bob can't ask for anything more.  He has a beautiful wife, two beautiful children and everyone is happy and healthy.  He wakes up in the morning in their nice comfy house where they started this young family. 

He takes his shower, drinks his coffee and feels great as he hugs and kisses his family before going to work.  Work is great, and he comes home to his wife's stories about what the younger daughter said today and what the older son achieved in school today.  Everyone gets along great and small "disagreements" are easily resolved with compromise.

Now imagine the same exact family.  Only this time, the mortgage payment has increased 60% from the year before, and so has the cost of energy.  His employer is feeling the pinch of the declining greenback and higher commodity prices, and five of Bob's co-workers just lost their jobs.

When Bob wakes up these days, he's not as energetic because he didn't sleep as well, but he's definitely moving faster to be the first to show up for work with a polished apple for his boss.  He races to work thinking about how he's going to get the money for the mortgage payment (so they can keep that house) while he eases up on the gas pedal so he doesn't waste gas. 

Forget vacation planning.  Now Mrs. Smith will have to work full time.  Who do they trust to watch the kids?  The kids aren't getting as much attention so they misbehave in school which causes more stress. 

The same exact "disagreements" they used to have are now classified as "arguments".
"Come give Daddy a kiss"  turns into, "Your mother told me what happened in school today."
The new questions of the day are, "Who spent 90 minutes on a phone call to California?" and "What did your boss say about your year-end bonus?"

Fast-forward 12 months, and the same family who thought they could get through anything is deciding who gets the kids on the weekend.

Meet Chris Rowe: one of the luckiest guys on earth.  He saw the signs of the Real Estate market topping out early.  The plan was to rent in the Miami Beach Bachelor Pad while real estate declined to the perfect buying point.  Enter Katie Rowe (who wasn't Katie "Rowe" at the time).  Oh yeah, and enter Maya Rowe (who wasn't anyone at the time).  That bachelor pad was starting to feel a bit claustrophobic.

Meet Kim: The real estate agent who was one of the only real estate agents in Florida to generate a nice fat commission (courtesy of Chris Rowe) in the summer of 2006.  Kim kept searching for wings on my back.

Meet the real estate market: "TIMMMBERRRRR!"

So what separates Chris Rowe from Bob Smith?  The family is much happier. 

Why?  Because if one asset is losing money, another asset is making money.

As many of you know, I like to hedge.  If you're a member of my options trading service The Trend Rider, you have both bullish and bearish positions in your account.  If the market crashes like it did in 1987, it's very likely that people who trade this way will have to fight keep their composure and maintain their "poker face" while they walk out of the office and around the corner.  There, nobody can see or hear them while they celebrate with an old school Toyota commercial style close-fisted leap.  It's not classy to shout "YES!" or "YAHOO!" in the faces of those who just watched their net worth disappear. 

I want you to consider hedging your account.  If the real estate market continues to tank, there is a way to profit from it.  When you're done reading this, look at an ETF called "UltraShort Real Estate ProShares (SRS)".

The investment seeks daily investment results, before fees and expenses, which correspond to the inverse of the daily performance of the Dow Jones U.S. Real Estate index.  In other words, if the Dow Jones U.S. Real Estate index declines by 10%, SRS will increase in value by 20%.  If the Dow Jones U.S. Real Estate index increases by 10%, SRS will decline by 20%.

I am not saying that RIGHT NOW is the best time to buy.  But add it to your arsenal and consider trading it.  If the market crashes because of problems related to declining property value, this will be a sweet spot in your portfolio.


“Profit from the Trend”

Chris Rowe
Chief Investment Officer
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