Invest with Pete’s Live Trade (June Edition) : Forget Tech Stocks!

Last night, we had our Invest with Pete’s Live Trade (June Edition!)

We talked about market directions, forecast and different stocks.

In particular, we talked about how to diversify your portfolio when market is going a period of rotation, with traditional growth stocks potentially losing some steam, investors are looking for new horizons. The metals sector, with its unique blend of stability and growth potential, has emerged as a compelling option.

Market Rotation: A Catalyst for Change

The recent market environment has seen a shift in investor sentiment. The focus on high-growth tech stocks may be waning as interest rates and inflation remains a concern. This has led to a rotation into more value-oriented sectors, including commodities like metals.

Why Metals Now?

• Hedge Against Inflation: Metals have a historical track record of holding their value during periods of inflation. As the cost of living rises, the price of metals often follows suit, offering a natural hedge against inflation's erosive effects on purchasing power.

• Industrial Demand: The global transition towards clean energy and infrastructure development is driving demand for metals like copper, lithium, and nickel. This long-term trend suggests sustained growth potential for these commodities.

• Geopolitical Uncertainty: Increased geopolitical tensions can disrupt supply chains and put pressure on commodity prices. Owning metals can provide a degree of portfolio diversification and protection during such times.

Investment Ideas to Consider

If you are looking to include metals in your portfolio, here are some possible options to consider

• Physical Metals: Investors can acquire physical gold, silver, or other precious metals through reputable dealers. While not as liquid as other options, physical metals offer a tangible asset with intrinsic value. Do take note that physical metals such as Gold Bullion often trades at a premium above the spot prices.

• Exchange-Traded Funds (ETFs): These offer a basket of various metals, providing diversification and ease of trading. Here are a couple of popular examples:

  • SPDR S&P Metals and Mining ETF (XME): This ETF tracks the S&P Metals and Mining Index, providing exposure to a broad range of large and mid-cap metal mining companies.

  • iShares MSCI Global Metals and Mining Producers ETF (PICK): This ETF offers global exposure to companies involved in the exploration, mining, and processing of metals.

• Mining Stocks: Investing in companies that explore, mine, and process metals offers the potential for capital appreciation alongside exposure to the underlying metal's price movements. However, this route carries higher risk due to the specific fortunes of the chosen companies. Here are a few examples (be sure to conduct your own research before investing):

  • BHP Group Limited (BHP): A global leader in mining and resources, with a diversified portfolio of metals including copper, iron ore, and nickel.

  • Rio Tinto Group (RIO): Another major mining company with a global presence, focusing on commodities like iron ore, copper, and aluminum.

  • Freeport-McMoRan Inc. (FCX): A leading copper producer with significant operations in the Americas.

  • World Copper Ltd (WCU): a Canadian resource company focused on the exploration and development of its copper porphyry projects: Zonia in Arizona and Escalones in Chile.  Both projects have estimated resources with significant soluble copper mineralization, and they boast exciting potential to expand the resource base.

Important Considerations:

We believe the metals market presents exciting opportunities for investors seeking diversification, stability, and potential growth.

Investing in metals carries inherent risks. Prices can fluctuate significantly, and market conditions can change rapidly. Conduct thorough research, understand your risk tolerance, and consider consulting with a financial advisor before making any investment decisions.

Happy Investing!

May Your Profits Grow!

Pete
Invest with Pete

The information provided in this newsletter is for informational purposes only and does not constitute financial advice. Readers should seek their own independent financial advice before making any investment decisions. Please note that while Pete is a portfolio manager, the opinions expressed in this newsletter are his own and do not represent the views of any organization. Always perform your own research and due diligence before investing.

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In case you missed the live trade session: