Silver, gold, copper and other precious metal prices are benefitting tremendously from the weakening U.S. dollar, and the money that’s been made in these stocks and futures is significant.
In my view, the commodities bull market has many years to go and represents a fortune-making opportunity similar to when Internet stocks were booming. Of course, the smart money has already been made. Most gold stocks with increasing production have already gone up tremendously in price. The returns now are the icing on the cake.
If there is any major correction in precious metal prices, a great new entry point would present itself. You don’t even have to own individual shares; just a basket would be exposure enough for most investors.
My favorite investment analyst, Jim Rogers, reiterated his view the other day that business students should not undertake MBAs, but should learn how to farm and/or mine. His view is that the global business cycle is going back to putting a premium on real, hard assets like land and resources. The Fed-induced inflation cycle should ensure hefty returns to investors and purveyors of real resources. Rogers is not very happy at all with the performance of the Federal Reserve and its turbo-charged money printing machine.
Like any bull market, those who own the right assets will benefit and those who don’t will suffer. It’s going to be a tough time for consumers if we get the kind of price inflation that Rogers is predicting. It’s just like when oil prices were hitting record highs not too long ago. It’s painful at the pump, but awfully profitable if you’re a shareholder.
So, we’re at a point now where the early money has already been made. These investors bought gold stocks when very few others were interested. Commodity-related investing has always been a sector that’s scared individual investors. There’s been a long-held view by a significant amount of investors that commodity-related speculating is beyond their level of understanding. People can easily wrap their heads around investing in a company that produces products and services they use on a daily basis. While consumers use commodities on a daily basis, these raw materials aren’t usually the end products that people see and consume. Add in the fact that commodity prices are actually derivative securities, and a lot of investors just ignore the sector outright.
As I say, the smart money has already been made in the current commodity price cycle. But there remains a lot of opportunity in this sector for the rest of this decade. The best way to research and consider investing opportunities in this sector is actually to talk with a broker. There are so many ways to express a view in this commodity price cycle that the selection is overwhelming.