Thanks to the pandemic, there’s a supply shortage in seemingly everything these days… from semiconductors to ketchup packets to just about anything you can think of.
So today, I thought I’d let stock market expert Adam Sarhan share a few ways to profit from the supply chain shortages we’re seeing in 2021.
If you’re unaware, the massive shortage going on across the globe is due to lockdowns, some of which are still going on today in some countries…
And when that happens, it causes extra stress on supply chains, creating shortages.
Why?
Because from the time an item is manufactured… let’s say somewhere in the far east, until it gets delivered and placed on shelves at your local Walmart or Home Depot or wherever, there’s a chain of hands it passes through.
If any link in that chain is broken or under pressure, like if they don’t have enough people working, it can cause a shortage. And there are ways to profit from the supply chain shortage of 2021…
How to Profit From 2021’s Supply Chain Shortage
First, we know it’s not going to last forever.
And the first area Adam discusses is transportation stocks, which have been strong. And he says one way to diversify and profit from the supply chain shortage of 2021 is through the iShares Transportation Average ETF (BATS: IYT).
This ETF of course tracks a basket of transportation stocks. And as you can tell in the chart below, it’s done quite well since the March 2020 bottom.
It fell from $203 to $116 before the Federal Reserve came in to save the day by pumping an unprecedented amount of money into the system. Whether the Fed should still be using emergency measures is a topic for another day…
And so it’s up over $270 now, far higher than before the 2020 crash. And many transportation companies are going to benefit from the reopening as more people ride planes, more goods are shipped and so on.
Economics 101 tells us that price is a function of supply and demand, and there’s a lot of pent-up demand.
This ETF is just one way to profit from the supply chain shortage of 2021. Check out Adam’s short video and he’ll cover more names, from industrial stocks to semiconductors to logistics to truckers and more!
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