Popular financial e-newsletter Profit Confidential reports that, for the second year in a row, the stocks of the self-storage companies were the best performing sector of the real-estate investment trusts (REITs). According to the Dow Jones All REIT Equity Index, which was up eight percent for 2011, the self-storage stocks climbed 35.4% in 2011.
The increase in business over the last two years was due to the rise in home foreclosures in the U.S. housing market, which has forced families to downsize into smaller rental housing.
Who would have thought, even 10 years ago, that the American Dream would be reduced to renting your home and stuffing the balance of your memories in a storage locker, says Michael Lombardi, lead contributor to Profit Confidential.
Rising home foreclosures have forced families into renting, and stricter mortgage-lending standards have forced those who would rather have a home to rent as well, Lombardi writes in Profit Confidential.
Companies like Extra Space Storage, Inc. and Public Storage increased their rental rates and are experiencing few empty storage units.
I believe the U.S. real estate market will continue to be a very difficult place to be in 2012, save possibly for the self-storage companies. However, you should be careful; theyve had a tremendous run already, cautions Lombardi.
Lombardis concern is that, after a 25- to-30-year down cycle on interest rates, inflation will push interest rates higher in the next cycle. Lombardi thinks that this will devastate any recovery in the fragile U.S. housing market.
My personal opinion is that the U.S. housing market is dead for years to come, says Lombardi.
Profit Confidential, which has been published for over a decade now, has been widely recognized as predicting five major economic events over the past 10 years. In 2002, Profit Confidential started advising its readers to buy gold-related investments when gold traded under $ 300 an ounce. In 2006, it begged its readers to get out of the housing market…before it plunged.
Profit Confidential was among the first (back in late 2006) to predict that the U.S. economy would be in a recession by late 2007. The daily e-letter correctly predicted the crash in the stock market of 2008 and early 2009. And Profit Confidential turned bullish on stocks in March of 2009 and rode the bear market rally from a Dow Jones Industrial Average of 6,440 on March 9, 2009, to 12,876 on May 2, 2011, a gain of 99%.
To see the full article and to learn more about Profit Confidential, visit http://www.profitconfidential.com.
Profit Confidential is Lombardi Publishing Corporations free daily investment e-letter. Written by financial gurus with over 100 years of combined investing experience, Profit Confidential analyzes and comments on the actions of the stock market, precious metals, interest rates, real estate, and the economy. Lombardi Publishing Corporation, founded in 1986, now with over one million customers in 141 countries, is one of the largest consumer information publishers in the world. For more on Lombardi, and to get the popular Profit Confidential e-letter sent to you daily, visit http://www.profitconfidential.com.
Michael Lombardi, MBA, the lead Profit Confidential editorial contributor, has just released his most recent update of Critical Warning Number Six, a breakthrough video with Lombardis current predictions for the U.S. economy, stock market, U.S. dollar, euro, interest rates and inflation. To see the video, visit http://www.profitconfidential.com/critical-warning-number-six.