The No. 1 Sector To Buy Into Right Now

I'll tell you exactly what that means.

It means the Fed is going to change how it weighs Treasuries in SLR calculations. After all, it makes no sense that Treasury holdings have the same weight as much riskier junk bonds. Lowering the weight of Treasuries in certain calculations is going to happen, for several reasons. I'm going to get into those in the next few days, but for now, it's enough to say that it'll have gigantic implications.

For banks, the implications are obvious: They'll be able to hold more Treasuries and reserve less against them, which will add to their profitability.

Here's What Smart Investors Should Do

So, you can now see that the sell-off on big bank names is a big mistake.

Be that as it may, there's a lot of profit lying there on the table for folks who know what's really happening. This ongoing dip is a golden opportunity to get into bank stocks. Take your pick: Bank of America Corp. (NYSE: BAC), Citigroup Inc. (NYSE: C), or Wells Fargo & Co. (NYSE: WFC).

I think the Financial Select Sector SPDR Fund (NYSEArca: XLF) looks particularly attractive right now. You can get it for a (relative) song at $33.50. XLF holds all those banks and many more, which is great for upside and a bonus if you're trying to keep it simple.

And while you're raking in the profits, just bear in mind, naturally, rising rates are nothing to be afraid of, and actually point the way toward healthy, robust economic growth – there's plenty of that on the menu for 2021, and I want to make sure you get the chance to make the most of it.

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Disclaimer: Any performance results described herein are not based on actual trading of securities but are instead based on a hypothetical trading account which entered and exited the suggested ...

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