The Best Industries To Invest In Right Now
Its already mid-August, meaning the summer trading session is nearly at an end. Where did the summer go? It seems like it should still be June. Oh well, I guess time flies
As September approaches, investors will be returning from vacations. Volumes should start to pick up and the market typically becomes more active.
Well also get a better idea of how volatile the last part of the year is going to be. More importantly, we might get some clues as to where the markets headed.
As such, nows as good a time as any to take a look at some of the years biggest underperforming industries and sectors.
You see, investors portfolios could change composition significantly heading in to the end of the year. And, its very possible well see a lot of sector/industry rotation in the coming weeks.
Heres the thing
This could be an excellent time to buy into down and out industries. Chances are, investors will be looking to cash in on their gains and move to areas with greater upside potential.
Lets take a closer look.
For the year, the worst performing sector is the coal industry, down a whopping 36%. Coal companies are getting crushed as energy buyers have moved to cheap natural gas.
If natural gas prices continue to reverse higher, coal could see a rally. However, its not one of the primary industries Id be looking at right now for investment opportunities.
Also near the bottom of the list are gold miners. Ive covered gold extensively in other recent articles, so Ill skip it here.
Heres what I do like
Both steel companies (-11% for the year) and industrial metals companies (-6% for the year) are worth a closer look.
Steel and industrial metals (such as copper) are basically straight up indictors of economic activity. These metals are used in construction, industrial production, automobiles, and more. In other words, theyre used in areas that perform best in periods of economic growth.
And thats exactly why I think the steel and industrial metals industries are ripe for investment.
Just recently, weve gotten a slew of better than expected economic news. Retail sales, industrial production, and housing starts were all better than expected. Those are exactly the areas that will require more steel and copper as they grow.
Even better, there are plenty of small companies in these industries trading at discounted prices. Now may be an opportune time to allocate some of your portfolio to these underperforming industries.
Yours in profit,
Gordon Lewis
Category: Investing in Penny Stocks
