As you know, last week Jerome Powell had his speech at Jackson Hole and said that he is not worried about inflation. While he said that he plans to pair back the QE bond buying program, or start to do so very slowly, by the end of the year, he also predicted that all the inflation you see around you is going to go away all by itself.
As a result, financial traders are telling themselves that the easy money and low rate policy is not going away anytime soon and are buying stocks. Some are also buying commodities. Check out the DBA ETF, which I have a core position in. This ETF tracks agriculture commodities.
When agriculture prices go up eventually food prices at the grocery store go up too.
This is inflation.
It’s not a prediction of what is happening – but what just happened yesterday, because DBA made a new high.
Outside of the financial market, though, it is the real estate market that is driving many people into investing with borrowed money. I’m investing in real estate myself via the RWR ETF and individual REIT stocks in my main account. RWR also made a new high yesterday.
REITs and real estate have been the hottest sectors in the entire stock market this year. While fad ETF’s like the ARKK has been trading weaker than the S&P 500 this summer and many of the stocks in it are still trading below their 200-day moving averages, RWR has simply charged up and up all year.
One REIT stock that I own, which is still in a good position for buying is PSB.
PSB is paying a 2.69% dividend. The company is based in Glendale, California and is a publicly traded real estate investment trust that acquires, develops, owns and operates commercial properties, primarily multi-tenant industrial, flex and office space. The stock appears to be coming out of a nice triangle consolidation pattern.
To beat the market you need to focus on the sectors and stocks that are beating the market. For more on my trading and investing strategies grab my book Strategic Stock Trading.