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Energy and Natural Resources Bull Market Investing

Commodities / Resources Investing May 31, 2008 - 07:44 PM GMT

By: Nadeem_Walayat

Commodities The world is now several years into the commodities secular bull market that is expected to span many decades. Undoubtedly the market trends will contain many mini-bear markets within the overall bull market as prices are bid higher by speculators chasing limited supply as we have witnessed with rice these past few weeks and are likely to witness with crude oil later this year.


However every mini-bear market will prove an excellent long-term buying opportunity, as the primary driving forces for the secular commodity bull markets will not go away i.e.

  • Emerging Markets Soaring Demand- A doubling in the worlds middle class from 1 billion to 2 billion each of whom will want to eat as well as we eat and have all of the luxuries that westerners enjoy.
  • Increase in world population that is expected to double this century.
  • Global warming's impact on food production as arid areas expand across the globe.
  • The ongoing debasement of world currencies continues with rampant inflation as a consequence of bad government that will further feed the uptrend in commodity prices.

Therefore, despite near term corrections, it is important for investors for the long-run to have adequate exposure to the natural resources sector, both for making profits and protecting the value of your wealth from government actions to debase the value of their respective currencies.

In this end there are many, ETF's and investment trusts available that help spread the risk amongst the resource sectors that are each at different stages of their current impulse bull markets or corrective bear market phases.

Your analyst primarily looking at ways of avoiding the destruction of hard earned wealth through high real inflation rates.

For indepth analysis on the commodities boom subscribe to our FREE weekly newsletter.

By Nadeem Walayat

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Nadeem Walayat has over 20 years experience of trading, analysing and forecasting the financial markets, including one of few who both anticipated and Beat the 1987 Crash. Nadeem is the Editor of The Market Oracle, a FREE Daily Financial Markets Analysis & Forecasting online publication. We present in-depth analysis from over 150 experienced analysts on a range of views of the probable direction of the financial markets. Thus enabling our readers to arrive at an informed opinion on future market direction. http://www.marketoracle.co.uk

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any trading losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors before engaging in any trading activities.

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