The Next Commodity Boom Is On Its Way

Commodities markets have had a rough decade with prices falling and falling. But now prices have turned around and have recently broken above its strong downtrend channel. To invest in commodities you need to be selective as not all commodities are treated equally just like not all stocks are great investments.

Metals used for batteries are seeing exponential demand and those the price is shooting to the stars but many energy markets are still struggling to recover. For those investors who are worried about inflation and want commodity exposure to reduce the risk and potentially profit handsomely you can buy the individual metals you think will do well or you can buy an index.

The best commodity index is the United States Commodity Index Fund (USCI). The index looks at 27 different commodities and chooses the 14 with the best relative strength at any given time. This gives you the best exposure the commodities that have momentum behind their rising prices.

The fund has two underlying strategies, first it invests in seven commodities with the strongest uptrends and the next seven commodities have the greatest backwardation (technical term in the futures market it is complicated to understand but in most cases backwardation should not happen and when it does it can provide smart investors extra return as the futures markets normalize again).

Since 1990 the standard commodity benchmark that has a passive investment in all 27 commodities has lost money where as the USCI is up 1100% over this time frame.

March 2020 looks like it was the final shack out of weak hands and smart investors can now take advantage of buying the best commodities for inflation protection and return potential with USCI hitting new 52 week highs.

Since 1990 the average annual return of buying USCI smart commodity index is 9% which is comparable or better than buying the S&P500.

The stars are aligning for a great commodity boom from inflationary pressures to increased demand for modern technology. Join smart investors on the ride and buy USCI today.

Divider provided by barge

Disclosure: I wrote this article myself, and it expresses my own opinions. I have no business relationship with any company whose stock is mentioned in this article. The information provided should NOT be considered advice. The topics discussed are risky and have the potential to lose a substantial amount. I am not an investment professional and therefore do not offer individual financial advice. Please do your own research before investing.

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