Most Popular
1. It’s a New Macro, the Gold Market Knows It, But Dead Men Walking Do Not (yet)- Gary_Tanashian
2.Stock Market Presidential Election Cycle Seasonal Trend Analysis - Nadeem_Walayat
3. Bitcoin S&P Pattern - Nadeem_Walayat
4.Nvidia Blow Off Top - Flying High like the Phoenix too Close to the Sun - Nadeem_Walayat
4.U.S. financial market’s “Weimar phase” impact to your fiat and digital assets - Raymond_Matison
5. How to Profit from the Global Warming ClImate Change Mega Death Trend - Part1 - Nadeem_Walayat
7.Bitcoin Gravy Train Trend Forecast 2024 - - Nadeem_Walayat
8.The Bond Trade and Interest Rates - Nadeem_Walayat
9.It’s Easy to Scream Stocks Bubble! - Stephen_McBride
10.Fed’s Next Intertest Rate Move might not align with popular consensus - Richard_Mills
Last 7 days
Why President Trump Has NO Real Power - Deep State Military Industrial Complex - 8th Nov 24
Social Grant Increases and Serge Belamant Amid South Africa's New Political Landscape - 8th Nov 24
Is Forex Worth It? - 8th Nov 24
Nvidia Numero Uno in Count Down to President Donald Pump Election Victory - 5th Nov 24
Trump or Harris - Who Wins US Presidential Election 2024 Forecast Prediction - 5th Nov 24
Stock Market Brief in Count Down to US Election Result 2024 - 3rd Nov 24
Gold Stocks’ Winter Rally 2024 - 3rd Nov 24
Why Countdown to U.S. Recession is Underway - 3rd Nov 24
Stock Market Trend Forecast to Jan 2025 - 2nd Nov 24
President Donald PUMP Forecast to Win US Presidential Election 2024 - 1st Nov 24
At These Levels, Buying Silver Is Like Getting It At $5 In 2003 - 28th Oct 24
Nvidia Numero Uno Selling Shovels in the AI Gold Rush - 28th Oct 24
The Future of Online Casinos - 28th Oct 24
Panic in the Air As Stock Market Correction Delivers Deep Opps in AI Tech Stocks - 27th Oct 24
Stocks, Bitcoin, Crypto's Counting Down to President Donald Pump! - 27th Oct 24
UK Budget 2024 - What to do Before 30th Oct - Pensions and ISA's - 27th Oct 24
7 Days of Crypto Opportunities Starts NOW - 27th Oct 24
The Power Law in Venture Capital: How Visionary Investors Like Yuri Milner Have Shaped the Future - 27th Oct 24
This Points To Significantly Higher Silver Prices - 27th Oct 24
US House Prices Trend Forecast 2024 to 2026 - 11th Oct 24
US Housing Market Analysis - Immigration Drives House Prices Higher - 30th Sep 24
Stock Market October Correction - 30th Sep 24
The Folly of Tariffs and Trade Wars - 30th Sep 24
Gold: 5 principles to help you stay ahead of price turns - 30th Sep 24
The Everything Rally will Spark multi year Bull Market - 30th Sep 24
US FIXED MORTGAGES LIMITING SUPPLY - 23rd Sep 24
US Housing Market Free Equity - 23rd Sep 24
US Rate Cut FOMO In Stock Market Correction Window - 22nd Sep 24
US State Demographics - 22nd Sep 24
Gold and Silver Shine as the Fed Cuts Rates: What’s Next? - 22nd Sep 24
Stock Market Sentiment Speaks:Nothing Can Topple This Market - 22nd Sep 24
US Population Growth Rate - 17th Sep 24
Are Stocks Overheating? - 17th Sep 24
Sentiment Speaks: Silver Is At A Major Turning Point - 17th Sep 24
If The Stock Market Turn Quickly, How Bad Can Things Get? - 17th Sep 24
IMMIGRATION DRIVES HOUSE PRICES HIGHER - 12th Sep 24
Global Debt Bubble - 12th Sep 24
Gold’s Outlook CPI Data - 12th Sep 24

Market Oracle FREE Newsletter

How to Protect your Wealth by Investing in AI Tech Stocks

Commodities Are Strong, But Which Ones Are the Strongest?

Commodities / Metals & Mining Jul 07, 2008 - 10:34 AM GMT

By: Frank_Holmes

Commodities

Best Financial Markets Analysis ArticleThere's been plenty written about how well commodities have performed in recent years.

But do you know which of these commodities have done the best between 1999 and 2007? Do you know which ones have been the brightest stars so far in 2008?


Below is a “periodic table” that shows both the absolute and relative performance of 14 key commodities.

We put this table together to show how these commodities perform over the long term and how dramatically that performance can change from year to year.

So which of the 14 turned in the top overall performance?

The answer, by a wide margin, is crude oil. For anyone who drives a car, this should come as little surprise.

The price of crude went up nearly 700 percent between the beginning of 1999 and end of 2007. This works out to an annualized return of 26 percent over the nine years, although oil's returns ranged from a positive 112 percent in 1999 to a negative 26 percent two years later.

The No. 2 performer was nickel, which is primarily used in the production of stainless steel and other alloys. Nickel rose 543 percent between 1999 and 2007, with its best year coming in 2006 when it was up 154 percent.

Third-best on the list was lead at about 410 percent, followed by copper at nearly 360 percent. On the soft side, wheat and corn have tended to move together – in recent years, they've done quite well.

At the bottom of the heap was palladium, which rose only 10 percent over the nine years, or barely 1 percent per year on average. That doesn't mean it didn't have some good years – palladium was up 113 percent in 2000 and 36 percent in 2005 – but these were pretty much offset by a string of down years.

Coal and aluminum were among the worst performers among the commodities, but even their returns far exceeded those of the Dow Jones Industrial Average (up 44.5 percent), the Nasdaq Composite (up 21 percent) and the S&P 500 (up 19.5 percent) over the nine-year period.

Here's the complete list:

For the first six months of 2008, most of the talk has been about oil, but crude's 46 percent rise leaves it well down the performance list.

Coal, up 88 percent between 1999 and 2007, is 140 percent higher so far this year, natural gas has climbed nearly 80 percent and corn 59 percent. Palladium, the long-term laggard, is up 26 percent, while long-term standouts lead and nickel are down 30 percent and 16 percent, respectively.

Commodities have gained stature in the eyes of investors in recent years, and we're among those who believe that they should be considered a permanent asset class.

We've long suggested that investors consider an asset allocation approach advocated by prominent portfolio manager and author Roger Gibson in which investments are divided among four broad classes: domestic equities, international equities, fixed-income securities and hard assets (commodities, precious metals, real estate, etc.), and rebalanced annually. A long-term study by Gibson found that equal allocations among the four asset classes provided a good way of balancing risk and return.

And while commodity prices have been volatile, we believe that they will continue to offer excellent opportunities for investors. The strong growth trend in the BRIC countries and other large emerging markets are the result of voracious demand that is outstripping new supplies.

This trend is the key driver of commodities markets, not the “speculators” being demonized by election-year politicos on Capitol Hill. We would not be surprised by a short-term correction in resource prices, particularly for oil, but long-term we see prices going even higher.

By Frank Holmes, CEO , U.S. Global Investors

Frank Holmes is CEO and chief investment officer at U.S. Global Investors , a Texas-based investment adviser that specializes in natural resources, emerging markets and global infrastructure. The company's 13 mutual funds include the Global Resources Fund (PSPFX) , Gold and Precious Metals Fund (USERX) and Global MegaTrends Fund (MEGAX) .

More timely commentary from Frank Holmes is available in his investment blog, “Frank Talk”: www.usfunds.com/franktalk .

Please consider carefully the fund's investment objectives, risks, charges and expenses. For this and other important information, obtain a fund prospectus by visiting www.usfunds.com or by calling 1-800-US-FUNDS (1-800-873-8637). Read it carefully before investing. Distributed by U.S. Global Brokerage, Inc.

All opinions expressed and data provided are subject to change without notice. Some of these opinions may not be appropriate to every investor. Gold funds may be susceptible to adverse economic, political or regulatory developments due to concentrating in a single theme. The price of gold is subject to substantial price fluctuations over short periods of time and may be affected by unpredicted international monetary and political policies. We suggest investing no more than 5% to 10% of your portfolio in gold or gold stocks. The following securities mentioned in the article were held by one or more of U.S. Global Investors family of funds as of 12-31-07 : streetTRACKS Gold Trust.

Frank Holmes Archive

© 2005-2022 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Post Comment

Only logged in users are allowed to post comments. Register/ Log in