We’re back with another segment of a fan favorite: “Buy It and Burn It.” Today we’re going over a great reflation trade idea for 2021.
Earlier in the week, we discussed the rising inflation we’re seeing as we inch closer to normalcy and the Federal Reserve keeps printing money.
Everyone keeps asking, what is the reflation trade? What does this mean?
It means that the dollar is becoming more abundant, which means everything we purchase regularly is becoming more expensive.
Our advice is the same as it has been for most of 2021: Don’t overthink it. There are too many obvious trades to worry about predicting the future. This reflation trade idea for 2021 is pretty simple as well.
After one of our favorite sectors, cannabis stocks, took a nosedive on Thursday, you might be a little concerned about the “simple” picks. That’s understandable, although we’re still bullish on pot stocks long term.
Don’t overthink this pair trade, either. Prices are beginning to climb as the economy faces an inflationary period.
Where do we see this the most? Commodities and hard assets. So what do we buy?
The SPDR S&P Metals and Mining ETF (NYSEArca: XME). This fund is catching a huge bid over our burn recommendation.
That’s largely because the underlying fundamentals of mining are concrete and iron-clad — pardon the puns.
The demand for metals and economic growth right now is strong. Copper breaking out to all-time highs. Silver is breaking out. Steel is shooting upward.
Mining is the place to be.
But what are we burning? We’ll give you a hint — it’s another commodity…
To find out the other half of our reflation trade idea for 2021, check out our video below.
As always, feel free to email your trading questions to firstname.lastname@example.org and make sure to stay ahead of the markets and subscribe to my YouTube channel.
P.S. If you’ve ever found yourself saying, “I wish I’d gotten into that stock earlier”… today might just be the day you retire that phrase.
Legendary trader Adam Sarhan has developed a system that can alert him to stocks getting ready to experience huge jumps in their share prices.
Invest in these companies before their shares soar… and huge gains are sure to follow.
According to Adam, the number of stocks hitting “major gain territory” skyrockets during earnings season. And considering hundreds of companies are getting ready to report Q4 earnings this week, there’s never been a better time to grab these huge windfalls.