Cyclical stocks are just that…they’re tied to the business cycle. For some areas, the cyclicals of boom and bust last longer than a year or two. This has been the case for the global commodities sector. Following the Great Recession, the metals & mining sector has been pretty much dead money for the better part of a decade.
However, that may be changing.
After spending the last ten years transforming themselves into lean and mean operations, metals & mining stocks are on the cusp of climbing another leg higher. With inflation rising, demand growing and better financial prospects for the underlying stocks, metals & mining names are starting to look like engines of growth once again.
Given the sector’s newfound profits, investors may want to consider the industry as a cheap play on global growth.
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