However, there is one indicator that can help gauge the movement of all classes and that’s . effects all good that can be purchase on the market, not just one- therefore leading to a rise in as a whole.
As a consumer, who likes inflation? When the price of goods rise it can severely dampen ones pay check. Unless, you shop at Whole Foods then you are screwed at the register before and after . If you’re an investor in on the other hand, rising can be advantageous as one would expect a higher return as the prices of consumer goods rise. Taking a glance at the chart, we can see over the past decade as began its accent from 2008 the rise in the commodity index has done the same. It is also worth noting, this is NOT a default action, but more often than none- throughout history commodity prices have moved well alongside .
Another factor to consider is the current administration’s stance on trade and protectionism. Bringing back jobs from overseas into the United States will definitely increase the prices of goods because of the higher production cost state side. Again- great for commodity investors and producers, bad for the overall economic well-being.
As I mentioned earlier, price cycles can also play a larger role when looking to invest in . Though it is heavily debated on whether cycles hold any merit in commodities-we have seen the price of rise and fall at precise time intervals. Through my research I've noticed Commodity prices usually move in 10 to 15-year price cycles. The Peaks and troughs of prices have been fairly consistent and are set to gain ground in 2018. However, super cycles in are nearly 50 years long and we are also seeing both short and long term cycles harmonize. Usually in this occurrence we see a sharp uptick in commodity prices that end up lasting for decades. Name one thing that can get up that fast after 50 years…I’ll wait.
While there this is only the tip of the iceberg when it comes to complex markets such as . We believe there is empirical evidence that tells us now is the time for this asset class.