Wall Street's hottest trade right now is one that doesn't even involve stocks

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Good morning and welcome to day two of First Trade. Did you heed our warning about crypto treasuries? Or are you one of the retail traders who has lost a combined $17 billion investing in them?

Rundown

• He wants to be your new meme-stock folk hero. We talked with the investor trying to engineer a GameStop-like rally in Beyond Meat. Could he be the next Roaring Kitty?
• Creative financing strategies for real estate. Business Insider's Kathleen Elkins spoke to part-time real estate investors who shared tips for scaling to 17 units in less than a year.
• Are double-levered funds not risky enough for you? There's a firm that wants to offer a handful of five-times levered stock and crypto funds, if it can get SEC approval.

But first, when there's turmoil, hide in debasement.

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Market musings

Debase this

It's no secret that investors and strategists across Wall Street like to put catchy terms on market dynamics they're observing. The TACO trade, FANG stocks, FOMO — you name it, there's a term for it.

Right on cue, there's a name for recent market moves that's emerged as a clear winner: the debasement trade. The focal point is concern over runaway budget deficits and persistently high inflation, as well as the lessening dominance of the US dollar.

There are two pieces to the debasement trade. On the buy side, investors are scooping up hard assets like gold and silver — both hovering near records — as well as crypto. These are all seen as beneficiaries of the dollar losing its foothold in the global order and inflation staying elevated.

On the other side of the ledger, you have the selling of currencies and government debt. While those moves have been limited in the US lately, Japan recently saw the yen and its own sovereign bonds sell off on signs that stimulus-friendly Sanae Takaichi could become the next prime minister. The yen fell 0.5% against the dollar and the Nikkei 225 closed at a record high after Takaichi won a parliamentary vote earlier today to become Japan's first female leader.

Indeed, continued stimulus from central banks globally keeps the debasement narrative running strong. As they push interest rates lower and keep printing money, inflation is at risk of spiking, an outcome that investors have rebelled against.

And as inflation rises, the best weapon against it will be — wait for it — rate hikes that will exacerbate concerns over sovereign debt.

Still, it must be acknowledged that — in the US at least — the sell side of the debasement trade is not roaring quite as loudly as the record-setting rallies in hard assets. The dollar is still at multiyear lows, but it's hardly in freefall. And Treasurys have actually been rallying lately, not selling off.

The best explanation is that, while the debasement trade is in effect to a degree, it's not a perfect match.

For one, there's more going on with gold and crypto than simply concerns about a budget deficit and inflation. Gold has been a major beneficiary of political volatility, which has sent investors scurrying to safety. Bitcoin, meanwhile, remains a risk asset closely correlated with stocks, rather than the inflation hedge it was once imagined as.

So while the debasement trade may not be a flawless way to explain market moves, it's proven itself to be the closest catch-all for a global marketplace contending with innumerable crosswinds.

The best way forward for investors is to monitor the components of the trade individually, and adjust accordingly to any exploitable dislocations.

Easier said than done, right? Keep reading for some pro tips on the matter.

On the move

The debasement trade — or at least half of it — in action! Hard assets gold and silver have been on an absolute tear, both clearing 60% returns year to date.

Silver has been the big winner, driven by a short squeeze amid a shortage of supply. Because the market is less liquid than the one for gold, price swings can be bigger in both directions.

Gold, meanwhile, has been a beneficiary of three main forces, most notably an overall aversion to risk as negative macro forces — like the global trade war — swirl.

Bitcoin hasn't had quite the same charmed existence as the precious metals, having dipped into negative territory for multiple months earlier in 2025. But in the second half of the year, it has benefited from its dual purpose as both a risk asset, correlated with record-setting stocks, and as an inflation hedge.

BI market mix

• AI is offsetting tariff pain. That's according to Torsten Slok, chief economist at Apollo. But a Harvard professor argues that AI spending is making up an unsustainable amount of GDP.
• The next Roaring Kitty? Demitri Semenikhin is buying up loads of Beyond Meat stock, which has many of the same attributes GameStop did before the original meme-stock frenzy of 2021. He told us he thinks shares are mispriced, so he's purchased millions of them.
• How to scale real estate, fast. BI's Kathleen Elkins tells the story of part-time real estate investors who used creative financing strategies to build a 17-unit portfolio in less than a year.

Chart of the day

When picking stocks, it's important to remember that volatility is your friend. (Just ask the trading desks across Wall Street, who crushed it on the equity-trading front last quarter amid an unstable environment.)

With that in mind, the chart above should have your mouth watering. It shows that a measure of median 63-day rolling stock-specific risk is at multiyear highs.

What does that mean exactly?

"This means we're in a historically opportunistic stock-picking environment," Morgan Stanley strategists led by chief investment officer Mike Wilson wrote on Monday.

Of course, you still have to select the right stocks. Volatility cuts both ways. But this is ultimately a sign that if you do your homework and choose wisely, your upside is higher than it would've been at any point in recent history.

Pro tip

Business Insider's Will Edwards highlights investing recommendations pegged to the biggest trends in markets.

Today's investing idea is from David Kelly, the chief global strategist at JPMorgan Asset Management. He offers a way to play the debasement trade, specifically linked to continued declines in the dollar as the US government-debt load grows.

Despite records in gold and bitcoin, Kelly isn't necessarily a fan of either. He says to instead look at stocks in the UK and Europe: they'll get a boost from a falling dollar, and he also views them as cheap and offering robust dividends.

"The dollar has come down maybe 9% year-to-date, but it could come down more," Kelly said. "In fact, our long-term outlook is that the dollar will come down a lot more. As it does, it should amplify the return for me as a US investor on those international investments."

He added: "So, A: they're cheap to start with. And B: I think I'm going to get a big currency kicker."

Examples of funds offering exposure to these trades include the iShares MSCI United Kingdom ETF (EWU) and the Vanguard FTSE Europe ETF (VGK).

Build-a-portfolio workshop

This week, we introduced the First Trade index, an equal-weighted basket of five stocks that will be adjusted each week. It started with five diverse industry bellwethers: Amazon, Caterpillar, Johnson & Johnson, JPMorgan, and Microsoft. Each week you'll vote one stock out, and one in.

You spoke up and the portfolio has been adjusted: We're adding Tesla ahead of earnings this Wednesday, hoping for a big share pop. And we'll be removing Caterpillar.

Apparently being a trusty blue chip stalwart isn't enough for the First Trade audience. Instead, we're going for a high-flying momentum stock by adding Tesla. Check back next Monday, Oct. 27 for how the addition has shaped our index's performance versus the market.

The First Trade team: Joe Ciolli, executive editor and anchor, in Chicago. Akin Oyedele, deputy editor, in New York. William Edwards, senior reporter, in New York. Steve Russolillo, chief news editor, in New York.