Commodities short term bear long term bull
Hi all,
Just a quick post to say:
- I have been watching diversified commodity indexes recently as they provide meaningful diversification in any portfolio (generally a small % allocation is recommended) .
- Over the past 9 years (as you can see) this has been in a strong and long-lived bear market. The bottom must be somewhere, below $13 is a good candidate for the bottom - and I will be a buyer at these prices.
- Recently Iron ore, Palladium, Crude have been on a rally - which shows that there are signs of life at least.
- Generally, commodities have been on a steep losing streak - which is even more drastic if inflation if considered - but rest assured that commodities both have value and are undervalued. I see Commodities as a valuable hedge against inflation / devaluation / debt crisis. All of these scenarios are taken increasingly seriously and are more than the ramblings of outsiders. In a crisis,when the banks and markets freeze up, those things with real-life immediate utility value will appreciate.
Discussing financial shocks with a friend from an emerging economy recently, they described how their family stayed afloat by entering (when the writing was on the wall but the chips hadn't yet fallen) a contract for physical delivery of key consumer commodities. These were repackaged and then sold to the local community at the market price of the day. The lines were long and demand outstripped supply. Despite significant currency devaluation, extreme uncertainty, and social upheaval demand for basic necessities remained - as will be the case in all current and future crises.
In a world that is in the grips of a major unfolding debt crisis I want at least a portion of my portfolio in things that you can "hold in your hand." Now, you can't hold an ETF in your hand. I will be buying physical precious metals (bullionstar dot com in Singapore) as no other commodities are really value dense or non-perishable enough for storage outside of specialised facilities. I intend to allocate 5% of my portfolio to this ETF below $13.
Wish me luck
Just a quick post to say:
- I have been watching diversified commodity indexes recently as they provide meaningful diversification in any portfolio (generally a small % allocation is recommended) .
- Over the past 9 years (as you can see) this has been in a strong and long-lived bear market. The bottom must be somewhere, below $13 is a good candidate for the bottom - and I will be a buyer at these prices.
- Recently Iron ore, Palladium, Crude have been on a rally - which shows that there are signs of life at least.
- Generally, commodities have been on a steep losing streak - which is even more drastic if inflation if considered - but rest assured that commodities both have value and are undervalued. I see Commodities as a valuable hedge against inflation / devaluation / debt crisis. All of these scenarios are taken increasingly seriously and are more than the ramblings of outsiders. In a crisis,when the banks and markets freeze up, those things with real-life immediate utility value will appreciate.
Discussing financial shocks with a friend from an emerging economy recently, they described how their family stayed afloat by entering (when the writing was on the wall but the chips hadn't yet fallen) a contract for physical delivery of key consumer commodities. These were repackaged and then sold to the local community at the market price of the day. The lines were long and demand outstripped supply. Despite significant currency devaluation, extreme uncertainty, and social upheaval demand for basic necessities remained - as will be the case in all current and future crises.
In a world that is in the grips of a major unfolding debt crisis I want at least a portion of my portfolio in things that you can "hold in your hand." Now, you can't hold an ETF in your hand. I will be buying physical precious metals (bullionstar dot com in Singapore) as no other commodities are really value dense or non-perishable enough for storage outside of specialised facilities. I intend to allocate 5% of my portfolio to this ETF below $13.
Wish me luck