Wheat and Oil to Spice Up Returns for Patient Investors

In a recent Wall Street Journal article, columnist Jason Zweig explains how investing in commodities can pay off. Even though assets like oil and gas, corn, wheat, hogs and nickel have been, in Zweig’s words, “stinking up the joint ever since investors raced to buy them during the financial crisis,” he adds that new research suggests commodities “may deserve a small place in the portfolios of iconoclastic investors  who have plenty of patience.” The article… Read More

Goldman: Commodities Will Surge This Year

Goldman Sachs is predicting 17 percent returns in the commodities market in coming months, according to an article in Bloomberg. In a report from the firm, analysts stated, “Given the size of dislocations in commodity pricing relative to fundamentals—with oil now having joined metals in pricing below cost support—we believe commodities offer an extremely attractive entry point for longs in oil, gold and base.” The article lists some of Goldman’s insights regarding performance over the… Read More

Commodity Indexing May Be Futile

Index investing in the commodities market hasn’t done so well, according to an article in The Wall Street Journal. The article cites data from Sam Stovall, chief investment strategist at CFRA Research, who said that since January 1970, investors who held the S&P 500 for at least 12 years would “always have had positive returns including dividends.” Commodity indexes, however, have not provided that type of return, says PNC investment strategist Amanda Agati, who argues… Read More

Oil Hedge Funds Struggling

Some of the biggest commodity hedge funds are shutting down despite a rally in raw materials during the past year, according to a recent article in The Wall Street Journal.   In 2017, the article reports, “closures of commodities hedge funds outnumbered launches for the first time in data going back to 2000 ” (data from Eurekahedge) and the trend has continued this year. Fund managers and traders say it’s happening because “investors who were… Read More

Big Oil and Big Tech Offer Different Opportunities for Investors

“There are two great times to make money in stock markets,” according to a recent article in The Wall Street Journal: “the post-crash rebound and the end-of-cycle excess. Oil and technology fit the pattern perfectly in the past two years.” But the sectors offer different opportunities for investors. Since January 2016, when oil prices hit a low, both the global oil and tech sectors have returned more than 80% (including dividends), “beating the wider market’s 53%… Read More

5 Commodity Picks for an Inflationary Environment

Along with its recent rate increase, the Fed has upgraded its growth and inflation forecasts—and this could bode well for commodity stocks, writes Validea CEO John Reese in in his article this week for Nasdaq. Reese cites a tighter labor market, stabilizing oil prices and slowing appreciation of the U.S. dollar as potential contributors to inflation, and cites AAII Journal data pointing to a strong outlook for commodity stocks: He identifies five commodity stocks worth… Read More