Commodities are leading the pack… One of the biggest opportunities of the millennium… A simple way to play rising natural resource prices… Are you ready for the commodities boom?…
When we left off yesterday, we promised an update on one of the top profit themes on our radar – the coming boom in commodities.
Our in-house geologist, Dave Forest, has been calling for a monster move higher for commodities since April.
That’s when he took over the reins of our elite natural resource investing advisory, International Speculator. As Dave told readers right off the bat…
We’re on the cusp of what I believe will be one of the biggest investment opportunities we’ve seen in the current millennium – a major up-cycle in commodities.
I believe commodities, as a group, are about to enjoy a historic resurgence. The kind that has happened regularly and reliably throughout history, and which has made fortunes for early investors.
Here’s a chart Legacy Research Investment Director Grant Wasylik passed around to the team earlier this week.
It’s tracks the performance of six different “asset classes” going back to the start of the year.
That’s Wall Street talk for a group of investments that have similar characteristics… and tend to march to the same tune in the market.
In this case, you’re looking at commodities, world stocks outside of the U.S., private equity, U.S. bonds, real estate, and U.S. stocks.
The S&P GSCI tracks a broad basket of commonly traded commodities. As you can see above, it’s up 5.3% so far in 2018. The closest asset class in terms of gains are U.S. stocks, which are up 3%.
The Toronto-based natural resource investment firm is well known in the commodities community.
If you’re not a commodities buff, here’s some background…
Billionaire Canadian fund manager Eric Sprott founded the company in 1981. In 2008, it listed on the Toronto Stock Exchange.
And in 2011, it joined forces with Global Resource Investments. That’s the natural resource brokerage firm founded by commodities investing legend Rick Rule.
One is managing assets for resource investors. Another is creating and operating exchange-traded funds (ETFs) that invest directly in precious metals.
The third is running funds that allow you to invest directly in natural resource projects.
All told, Sprott has more than $11 billion in assets under management. If you’re bullish on natural resources, that makes it a “one-click” way to play a rising tide. The higher commodities prices go… the more revenue Sprott generates.
The company has been a holding in the International Speculator portfolio since June 2017…
And as you can see, it’s up 61% since then.
Investors are getting positioned for higher commodities prices… by piling into Sprott shares.
As we’ve been telling you, you should treat October’s stock market rout as a dress rehearsal for the next bear market… or even the next 2008-style crash.
The S&P 500 is down just 7% from its 52-week high. But over the past 30 years, it’s plunged 20% (on Black Monday in 1987)… 49% (the dot-com bust)… and 57% (the 2008 meltdown).
Nobody can predict when these kinds of events will happen. But we can say with certainty that they happen.
And if you’re not paying attention to diversification, they can wipe you out.
By owning different investments that move independently from one another, you can make money in bull and bear markets.
That boosts your returns over the long run. It also means you’ll sleep sounder at night.
The last thing you want is to be lying awake in a sweat over the kind of relentless market plunges we saw a decade ago. Those amped-up levels of fear will make you do dumb things with your money – like panic sell near the bottom.
They’re not just this year’s best-performing asset class. They’ve been rising when just about everything else is either falling or flat.
If you’re a paid-up International Speculator subscriber, you’re already following Dave’s individual commodity recommendations.
If you’re not a subscriber, one way you can get broad exposure to commodities is through the iShares S&P GSCI Commodity-Indexed Trust (GSG).
It gives you easy access to the energy, industrial and precious metals, agricultural, and livestock markets. That makes it a simple way to ride the coming bull market higher.
Do you agree with Dave that a bull market is coming? Tell us why – or why not – at [email protected].
November 1, 2018
P.S. Rick Rule is an old friend of Legacy Research founders Bill Bonner and Doug Casey. He was also a keynote speaker at our first annual Legacy Investment Summit in Bermuda last month.
Rick delivered a masterclass on commodities investing at our Summit. He also named his favorite commodities for the coming upcycle. Stay tuned for more on what he shared with the group in future updates…