2.) Russia and Ukraine It's hard to tell how long the Russia/Ukraine conflict will last and there a lot of moving parts to how it may end. What makes this war different than some recent conflicts is that we have some of the biggest exporters of commodities essentially being cut off from global demand. This creates massive supply constraints on a global scale that has sent prices higher. Some of the biggest exports for these two countries are wheat and energy. Crude oil and gasoline have both spiked 40% on the news, while wheat surged 60% higher after the invasion. 3.) Supply Chains For over a year, the pandemic prevented a big percentage of the global population from living their normal life. In the early stages, global demand for commodities was turned off and prices tumbled. Producers adjusted, by lowering their output as commodity prices dropped. But as global demand came back, commodity producers were slow to adjust, unsure if COVID wouldn't come roaring back. At the moment, most of the world is free from the hassle of COVID. However, shutdowns over the years have clogged supply chains. The demand for goods is creating an environment where consumers are driving prices higher for goods that aren't immediately available. Demand destruction is yet to been seen with these higher prices, and while supply chains are improving, the relief on prices seems far away. How can an average investor play? Most investors are not sophisticated enough to trade futures. However, there are products that will allow us to take advantage of the big moves in commodities. 1.) Commodity ETPs- Exchange traded products like ETFs or ETNS allow investors to get broad exposure to the underlying commodity. For energy there are popular products like UNG for natural gas which allows the investor to buy commodities like they would a stock. XLE is a popular option that seeks investment results correlated with stocks that are in the Energy Select Sector Index. There are ETFs for grains like wheat, corn, and soybeans. In fact, you can find an ETF for almost any commodity out there. Investors can also go to ETFs that capture a basket of stocks instead of the commodity itself. DBC is the Invesco Commodity tracking fund that gives an investor diversification into the space. So far this year, this ETF is up over 30%. 2.) Commodity Stocks- Instead of capping upside within an ETF like DBC or XLE, less risk-averse investors can target individual stocks. There have been moves in some commodity stocks that even tech investors are jealous of. Example: So far in 2022, EOG Resources (EOG) has gained +56%, Mosaic Company (MOS) is up +75%, and Occidental Petroleum Corp. (OXY) has nearly doubled, climbing 93%. 4.) Inverse ETPs- Commodity players can also profit from certain commodities going down thanks to inverse ETFs. While these products don't target every commodity space, they allow energy and mining speculators the ability to play on the short side. The Trend is Your Friend Nothing goes straight up, so investors shouldn't chase this volatile commodity group higher. Instead of blindly buying, investors should target pullbacks. Commodities can trade in a very technical manner, so buying moving averages and other indicators can be very fruitful. Identifying Today's Most Promising Trends Commodities are a largely ignored asset class that are typically used as a small percentage of an investor's portfolio. While 10-15% as a percentage is widely accepted, there is reason to believe that right now is the perfect time to increase exposure. In fact, due to recent events, there is a case that investors should become directly involved in individual commodity plays. An easy way to get started is to follow my Commodity Innovators portfolio. Our approach is simple: we identify strong trends in the commodity markets and target big profits with stocks and ETFs. We aim for short-term moves that can generate double-digit gains within days - and we'll ride longer-term trends that can produce triple-digit returns. And the approach is working. We've recently given members a chance to close gains of +50.8, +65.3%, even +109.6%.¹ With current trading conditions, I believe the most explosive profit potential is yet to come. Commodities also give you the benefit of diversifying your portfolio to hedge against downside risk in other market sectors. When you look into Commodity Innovators today, you're also invited to download The Great Inflation Threat: 5 Stocks to Preserve Wealth and Thrive. This urgent Special Report reveals five companies fueled by on-going inflation. Each could hand you significant gains in the coming months. Don't miss out on these powerful trends. The deadline to gain access to Commodity Innovators and claim The Great Inflation Threat free special report is Sunday, April 3rd. Check out Commodity Innovators today » All the Best, Jeremy Mullin Zacks Strategist
Jeremy Mullin is a technical expert with 17 years' experience pinpointing the best times to buy and sell commodities. He is the editor of Zacks Commodity Innovators. |
没有评论:
发表评论