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Profiting from the reflation

As we mentioned yesterday in, "A good bear is hard to find", most everyone has recently been quite bullish on the U.S. stock market since the Fed came to the rescue with their liquidity injections and interest rate cuts.

Now, you may not be so eager to go out and start loading up on stocks just because there is a lot of money sloshing around and someone is keeping the party going. But you might be interested in some areas of the stock and commodities markets that could benefit from the reflation, bolstering their ongoing fundamentally driven advances.

Today we'll take a look at the concept of "profiting from the reflation" by highlighting some comments made by investor Jim Puplava in a recent Financial Sense Newshour broadcast.

If you've listened to the broadcasts before (and I highly recommend them), you'll certainly be familiar with some of the themes we're discussing here today. Jim has been recommending that his listeners gain exposure to the areas of commodities, natural resources, and mining shares for several years now. He has been bullish on energy, water, and the precious metals during that time frame.

In early 2005, he summed up his views on the developing bull market in commodities and tangibles in an article entitled, "Unloved, Undervalued, and Underowned".

Now, with more attention being focused on the commodity and resource sectors' recent gains, Puplava feels it's very likely that a lot of money will be funneled into these relatively small markets in the next few years. We could see greatly increased share prices and market caps for some of the companies in these sectors over the coming years.

He's also bullish on areas where spending will have to be maintained or greatly increased, such as infrastructure and industrial development. Besides that Jim's staying defensive, concentrating on consumer staples, healthcare, and good dividend-paying stocks.

But there's no need to take my word for it; why don't you have a listen to the broadcast, or read the transcript and some of Jim's past articles. This way, you'll be up to date on profiting from the reflation.

We'll have more on resource related investments in the days ahead. Keep an eye out for upcoming posts on investing in energy and junior mining shares.

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