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Stick With Tech Over Mining, Says SIA Wealth Management

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(Kitco News) - Despite trade tensions and recession fears, U.S. equities and the technology sector are still more attractive than commodities, according to one market expert.  

SIA Wealth Management, an independent investment management firm, uses relative strength and point-and-figure charting in their market analyses to determine money flow directions. According to the firm’s president, Ted Bader, his firm’s findings point to U.S. equities and technology as the most attractive sectors for investment.

In an interview with Kitco News on the sidelines of the Inside ETFs Canada conference, Bader said that the hot sectors right now – similar to previous years – are U.S. equities, computer and information technology, aerospace, defense, and certain sectors in health care. “Those continue to be the strongest sectors that we see,” he said.

Bader said mining is trailing those sectors.  

“We analyze about 31 different sectors and mining is 24th, so it’s not the bottom, but it is what we consider one of our weaker relative strength areas,” he said. Bader noted that this doesn’t necessarily mean the mining sector is a bad space to be in, but rather that there are “more positive opportunities above the mining sector.”

Bader said that due to the firm’s rule-based formula, his analysts need to see more consistent momentum in the mining sector before moving into the space.

“Because we’re tracking price movement, we’re always going to be a bit lagging the trend,” he said. “We’re not trying to figure out when commodities or when mining and metals are going to take off. We need to see it start to take off first before we start to invest, and to be honest we haven’t seen that yet.”

Bader emphasized the benefits of using a rule-based system to analyze the market, stating that it is an efficient way of overriding bias and ensuring reliable results.

“We’re following a system and a process that says right now, equities is the place to be, especially the U.S. equities and certain sectors within that, and we’re having great performance because of it,” he said. “Just not the mining sector, but that changes. Everything is cyclical.”

Currently the firm’s analysis has positioned commodities as an unfavorable sector for investment, Bader said.

“Commodities, as a whole, are at the bottom,” he said. “[They are] below bonds, below cash because they haven’t performed, but once they start to rise, we’ll start to see mining and metal companies, and other resource-led economies perform well.”

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