Fannie Mae (OTCBB:FNMA) and Freddie Mac (OTCBB:FMCC) are undoubtedly two of the biggest and most controversial mortgage companies in the US. Fannie Mae was created during the great depression in order to provide local banks with federal money to finance home mortgages, in turn resulting in more affordable housing and a higher level of home ownership. In the 1970’s Freddie Mac joined Fannie Mae. In current day, these two own about half of USA’s $12 trillion mortgage market. That’s quite a big number. Let’s get to why Fannie Mae and Freddie Mac (OTCBB:FNMAOTCBB:FMCC) will be making you money.
1. The US economy is making a comeback. After being hit hard during the 2008 recession, the US is ready to bounce back. A low Canadian dollar also signals well for the US as they can buy from their neighbors and get 20% off. This works quite well for FNMA and FMCC as the number of people wanting to own homes. If the unemployment rate keeps on dropping, these two stocks will prosper as more people will want to buy houses.
2. FNMA and FMCC are very good stocks to trade on. By trading on, I mean you can make money off these two gems bi-weekly. When one is up, the other is up. So it’s double the gain and double the loss. Looking at both of their charts for the last 3 months, there have been numerous opportunities to hope on board at $2.10 and say bye at $2.40. That’s a good 15% you could make every 2 weeks.
Basically, FNMA and FMCC can prosper. If the U.S. economy makes a full turnaround, these two could mirror pre-recession times. With the U.S. creating 257,000 jobs in the month of January, it is already a signal that the U.S. economy is making a turn for the good. More houses will be bought meaning that FNMA and FMCC are headed to the top.
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