Daily Stock Pick for September 29, 2023

It’s the last trading day for both the month and quarter…

And boy am I glad it’s over!

The third-quarter of the year – and September in particular – has historically (spanning back multiple decades) been the weakest period for the stock market in the year…

And 2023 has been no different.

The good news is that the fourth-quarter is historically the strongest period of the year – especially in pre-election years.

So, I’m very excited to start sending you some high-potential capital gains opportunities next week.

But for Friday, as always, let’s look at a high-yield stock for “cruising” into the weekend.

Today’s pick is yielding nearly 7%…

But allows you to get diversified exposure to a red-hot market right now – commodities.

Sure, the yield may not be as high as if you took a concentrated position, like say in a midstream energy company…
But the scale of diversification simply makes it a much safer yield – a more-than-worthwhile tradeoff.

Blackrock Resources & Commodities Strategy Trust (BCX)

BCX is a closed-ended fund that, as the name suggests, invests in commodity companies. It does so across three main sectors – energy, mining, and agriculture. As energy stocks have surged this year, the weightage has shifted more toward energy, followed by mining, and agriculture as a fairly distant third.

BCX’s top ten holdings comprise about 45% of its total portfolio. And these major holdings aren’t small highly risky up-and-comers – but the big multi-billion-dollar names most investors would be familiar with.

BCX is currently yielding 6.7% – which is a very solid yield. But while it is certainly possible to get higher yields from the commodity sector elsewhere, you’d be hard-pressed to do so without taking on substantial concentration risk or having to spread your capital around various high-yielding stocks.

In sum, BCX is an “all-in-one” commodity-focused income play with solid yields. If you’re looking for income exposure from the commodity sector, BCX is a nice “buy and forget” investment.

To your wealth,
Felix @ Ace of Investing