The Long-Term Case for Commodities

Commodities are Historically Cheap

Let’s start with the bird’s eye view. Commodities are at decade lows relative to equities. They are historically cheap on a long-term basis.

With a closer view, they are nearing a breakout. We must keep a close eye here…

Structural Growth Drivers

After a decade dominated by ‘innovated’ tech companies, investors have forgotten about the world’s longer-term growth engine. Emerging markets.

India is just one example of many emerging countries with some very bullish demographics. Demand for goods is heading exponentially higher in the years to come…

Japanese interest rates are screaming from the rooftops that the world has changed. We are in a higher growth environment. Japan's 30-year JGB yield touched 2.1% this week, the highest since July 2011.

Valuations may not be a great timing tool, but US equities certainly don’t look attractive on a long-term basis. Especially when some of the largest tailwinds to our equity market over the past few decades including low interest rates and persistently low inflation are now a relic of the past.

The S&P 500's forward price/sales ratio has risen rather sharply in recent months and is nearing the all-time highs reached in 2021.

Commodities anyone?