When in doubt, seek safety in the leaders.

With markets jittery all over the place, the one area investors still seem to be pretty confident in is the Home Builders. And why not? In a declining interest rates environment, home buyers can finance purchases at historically low interest rates — why wouldn’t they be buying and building new homes?

Of course, even in the strongest names, this is no time to be a hero. Prudent risk management is still job #1 and we are not looking to be too aggressive here. Therefore, we’ve got a bullish play on tap, but we’re approaching it in such a way so as to put ourselves in position to participate in upside as cheaply as possible. [Read more…]