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Writer's pictureFahad H
Jul 20, 20192 min read

Basic Materials Bundle


Basic Materials are fundamentally what the world is made of and offer solid investment opportunities depending on where the economy appears to be at any given time during the ever-moving economic cycle. Your fundamental investing approach therefore should be to keep an eye on economic indicators to help predict the cycle’s rotation. Among the different market types the Basic Materials Sector often signals progress in emerging from a recessionary dip in the business cycle. Fundamentally it indicates businesses and governments are spending money on building which obviously requires Basic Materials with which to build. But there are 17 categories of Basic Materials to track. They don’t all respond to early demand in the same way. That’s why investors should learn a little more about tracking the broader picture as sketched by the leading indicators. Learning to read leading indicators helps you anticipate what’s likely to happen next.

Part 3 of a 3 Part Series on Basic Materials The Basic Materials Sector as an Investment—Advanced Methodologies This series of three installments has looked first at the fundamentals of Basic Materials. Part II examined the intermediate view of what impacts different elements within the sector. This third installment will show some of the companies in many of the 17 segments of Basic Materials that may offer investment opportunities. Investors are reminded that investors should learn to consider all aspects of a company, including market price, market cap, price/earnings ratios, return on equity, dividend yield, long-term debt to equity, price to book value, net profit margin, price to free cash flow, and anything else that matters. To really get a solid perspective on the tons of data available, investors should check the possibility of using the SNL Financial resources.



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