5 Commodity Stocks to Buy for the Global Rebound in 2021, putting a stiff wind at the back of miners and other commodity stocks.
The world is navigating its way out of the COVID-19 pandemic, and demand for goods and services is starting to return to pre-pandemic levels. That's helping to boost the price of several commodities – and the miners and other commodity stocks that produce them.
Bank of America analysts say U.S. GDP will grow 6.5% (up from a previous 6.0% forecast) after declining 3.5% in 2020. Goldman Sachs recently boosted its GDP estimates to 6.8%. Kiplinger sees GDP improving by 6.2% this year. Global estimates are rosy, too; Fitch Ratings recently upgraded global GDP growth estimates to 6.1%.
All this signals opportunity in metals, wood and other commodities.
"Continued improvement in the global economy should support robust commodity demand," say Wells Fargo Investment Institute strategists. "Moreover, supply levels likely will stay constrained in the near term, in part because last year's oil-price drops devastated weaker suppliers. The suppliers that remain may be slow to respond to increased demand, which should support higher prices."
Commodity stocks provide an additional benefit. This resurgence in economic activity is driving an uptick in inflation. Inflation causes the real value of cash savings and disposable income to drop, so investors are constantly on the lookout for investments that can grow their money in line with rising prices. Commodities can provide such a hedge.
Investors have the option of buying commodities outright via funds such as gold ETFs and silver ETFs. But you can also gain indirect exposure by purchasing commodity stocks, such as these five highly regarded picks – and in many cases, they can supply you with dividend income as well. Let's see how Wall Street analysts tracked by TipRanks feel about these companies.
Read 5 Top Commodity stocks with the link below.