How to Invest in Commodities When Everything is Expensive

How to Invest in Commodities When Everything is Expensive

Right now, everything is more expensive than it was 18 months ago - and most things are much more expensive.

Stocks especially have risen further and faster than even the most bullish prognosticators expected.

Can they rise higher still? Of course. But that’s not the point.

The point is that it’s tough to get excited about buying stocks on a fundamental basis when they’re much more expensive than they were a year or two ago. With unemployment near multi-decade highs, the price of nearly every commodity on the rise, and a concerted effort to devalue the dollar, the American consumer is getting pinched on all sides. It’s only a matter of if, not when, stocks will correct.

We know that when the broad market falls, many other un-related sectors get creamed as well. Junior gold mining stocks, for instance, typically fall dramatically when the broad market dips.

That’s because many investors pull their riskiest capital out the market soonest. They’ll let the money ride on blue chips, but not on risky micro-cap resource companies.

If Exxon Mobil (NYSE: XOM) catches a cold, you can bet that tiny oil exploration companies will get pneumonia and some will die.

So how can you protect your portfolio and make moves to benefit from a broad market correction?

First, you need a plan. If you don’t have a plan then you probably won’t have success. Every investment move you make has to be a part of a coherent, diligent and deliberate plan - for the same reason that you should know the retail price of an automobile before you go to the dealership to make a purchase.

If you don’t have a plan, or don’t have any idea about the price you want to pay, you’ll probably end up paying too much. So I’d recommend making a list of securities you want to own, or ones you want to own more of, at the price you want to pay.

Yesterday I mentioned that I’d discuss my three favorite ETFs in today’s issue. I also mentioned that I had received some helpful comments on how to personally prepare for food scarcity. Some of you wrote in to ask if I could review those techniques. You can read all about those techniques by clicking here.

I like these three investments because they’re in three sectors that will benefit in the age of higher inflation, higher oil prices, and higher food prices.

One of them is a pure play on the likelihood that silver prices should continue rising. It’s one of the best, lowest cost ways to invest in paper silver, and more than any other silver ETF it’s kept pace with the price of the physical metal.

The second ETF tracks a basket of gold miners. It’s the simplest way I know to buy the best of the best small to mid cap gold mining companies.

And the third is one of the largest agriculture ETFs in the market. It tracks the biggest and best agriculture companies in the stock market.

I believe that these three ETFs will be much higher one, two and three years from now, but I also believe they could be in for a correction in the short term.

If you’re interested in finding out about these three ETFs, I have an updated write-up available to read. Click here for the full story on these investments.

wyattresearch.com