Soybeans has become one of the most tempting investments going into 2019, says Matt Badiali, founder of The Real Wealth Strategist. And it’s not just because the United States is the second largest exporter. It’s because of the on-going trade war.
Soy farmers have become one of the first victims of this US-China trade war. During a trip this past Thanksgiving holiday, natural resource expert, Matt Badiali saw first hand the devastation of soybean crops. In his latest article, Badiali illustrates hills of crops rotting.
China and the US have imposed tariffs on products, including soybeans and other agricultural products. China is responding to tariffs that President Trump has imposed on their high-tech goods. Badiali points out that the President’s trade policy is putting pressure on farmers, with many resorting to bankruptcy filings.
What Does This Mean For Investors?
This trade war has become a detriment to farmers, but an advantage to investors. Sometimes our initial reaction is to under react to a crisis. But according to Matt Badiali, investors should pay attention, and keep a close eye on the agricultural sector because it offers a big opportunity since soybeans prices are falling.
Fund managers look forward to crisis as opportunities and take fear and hesitation out of their equation. During the Toyota recalls when stocks slightly slipped, fund managers purchased some shares of Toyota. When airlines have a crisis and their shares plunge, you buy stock in airlines. Now, farmers are sitting on their soybeans, and Badiali points out, these farmers will plant less in 2019.
With the current trade wars, which accompany a 25 percent tariff, China has turned to Brazil for soybeans, and stocks are dipping, giving investors a good opportunity to take advantage of a crisis situation. Badiali says now is the time to jump on this stock trade.
Matt Badiali got start as a scientist. With a Earth Science B.S. degree from Penn State, and a M.S. from Florida Atlantic University, he became a natural resources expert, exploring, traveling, and consulting for various entities. After more than 20 years working in the field, he eventually made his way to Banyan Hill Publishing, where he is editor of the widely popular newsletters, Real Wealth Strategist and Front Line Profits.
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