- Tech and future stocks have had an extraordinary year so far.
- During the first round of stimulus a lot of new money was created out of thin air.
- Another round of financial stimulus is likely to help people and businesses through the tail end of this pandemic.
- The best place to be positioned is for real assets and good, safe yields.
The reason real assets do well in times of extreme financial stimulus is because those assets are more or less a fixed amount. More gold will be mined, more houses will be built, but it takes a long time and it happens at a steady rate. When governments around the world all simultaneously made money out of thin air in order to help keep their economies afloat, it flooded the system with extra money. This basically means each asset is worth more money as there is a lot more money instantly but essentially the same number of assets to park that money. This makes the dollar weaker, but everything that dollars buy worth more.
As far as real assets go, gold still looks good to keep going higher from a technical stand point, and silver is still priced higher than it has been in 7 years. Further, these will be instantly helped if another round of stimulus happens. I think miners of these two asset classes will continue to do well:
Buy: AG, EGO
Another set of real assets that should be hot over the next two years is real estate. For this we'll have to pick and choose wisely because of course there has been an irreversible shift to digital formats that will leave some industries reeling. I see many malls, theaters, and to a lesser extent offices continuing to struggle over the next few years. Only the strongest will come out ahead in those areas. However there are many REITs that are very safe, such as net lease REITs. These should continue to see the benefit of money shifting toward them, along with people eventually chasing safe yields since treasury yields are so low.
Buy: FRT, MPW, SRC, STOR
Also oil and gas names may bounce around a lot in the coming 6 months as there will still be demand issues in the short-term, but these all should be much higher in 1-2 years:
Buy: AR, EOG, ET, SU
Other random ratings:
Buy: BDSI, KLR, ROKU
Hold: MSB, PEI, TWLO, XOM
Sell: AAL, HTZGQ, MAR, NKE, PTON, RRGB, TSLA, TTD
Analyst's Disclosure: I am/we are long AG, AR, BDSI, EGO, EOG, ET, FRT, KLR, PEI, SRC, STOR, SU.
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