The basis for investing in a steel exchange traded fund is a safer way to capture global growth. "The base metals sector is very cyclical so if economic growth or public investment were to slow down, steel makers would feel it," says Seeking Alpha. If people need steel then they will need other base metals, for example copper wiring and other performance metals/alloys. The SPDR Metal and Mining (XME) has more diversification than the the Steel ETF (SLX). These ETF’s can be more volatile, so be sure to set a stop-loss at 8%.
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