...yes, Materials/Resources are bombing out, and a contrarian investor would be tempted to buy resource stocks.
...but notice that resource stocks tend to suffer large declines in each episode of crisis, and arguably we are in the midst of one -i.e the China deflationary crisis and another ahead- a synchronised global recession.
...after the deflation comes the Inflation 2.0, or unless we get Stagflation, and in its aftermath, resource stocks could begin a big recovery, until then there could be more pain ahead.
Arguably, the two most washed-out ETFs among the hundreds I follow are Materials (XLB) and Brazil (EWZ). Over the past 20 years, they essentially have a 100% win rate if holding for 1 year. Both also tend to move inverse to the dollar, so there's that.
