Submitted by Anonymous on
Given the current market rally, especially in commodities, would you consider it to be a good investment opportunity for long-term investors? I ask after reading about growing demands for natural resources from China and other industrializing nations.
Also, would you recommend that an investor choose ETFs in commodities or directly invest in commodities themselves? And would it be a wise investment for future retire planning?
Thanks,
William Do
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William replied on Permalink
[correction] ...for future
[correction] ...for future retirement* planning?...
tom replied on Permalink
Commodities Investment
Thanks for the comment William.
My personal view on commodities as investments is bullish. I assume by "long-term" you are talking about minimum 5 year horizon--more appropriately 10?
There has been a strong run over the past several months. Mitigate that by wading in and dollar cost averaging.
Certainly seems that continued deflationary pressures are a real possibility over next year or two.
After that, however, unprecendented monetary and fiscal stimulus worldwide would certainly seem to tip the probability scales towards inflation.
I don't buy the weak China / developing countries thesis in long-run. Those are clearly engines of growth and emerging consumer cultures over next 10-20 years.
Definitely would recommend ETF or index versus individual securities or active management. I am never an advocate of individual stocks for retail investors. Also, ETF/index are inexpensive and provide some diversification.
Check-out Jim Rogers (very bullish China and commodities) and recent launch by Taleb's group of another hyper-inflation hedge fund.