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Commodities - China Corners Markets

We haven't yet begun to plan...yet,
In its latest five-year plan published in March, Beijing showcased how it will go about strengthening its system of reserves of energy and commodities, including through holding strategic stockpiles. An official at the country’s reserves bureau set out Beijing’s views on commodity security in an article published in a Communist Party magazine last year: Stockpile a range of commodities. That includes those in short supply, those for which there is high dependence on imports, those that exhibit large price fluctuations, and those produced in politically and economically unstable countries, the official wrote.
u-s-infrastructure-plan-faces-problem-china-s-commodities-copper-binge

Comments

  • an answer to this is FXC, LIT REMX!
  • edited April 2
    Generally, it’s been a decent year for hard assets (which includes commodities).
    Yesterday - OPGSX +4.12% (but negative for year), PRAFX +1.79%, TRGRX +1.63%, BRCAX +.28%

    I don’t think the above one-day return proves anything, but it does contrast nicely with the bear market commodities went through for over a decade up until about a year ago. The charts for commodities were truly “off the cliff” for that lost decade. The China story is just one of several fundamental changes that have led to the turn about. Toss in pent up demand as Covid winds down, a move toward private home ownership (deemed safer by many following Covid), supply disruptions caused by the Trump trade war, a massive infrastructure bill in the works, and three rounds of stimulus checks sent out to most Americans ... and you have some of the forces behind the upsurge in hard assets.

    (I don’t understand why former Pres. Trump isn’t credited with that last $1400 payout from the Treasury. His final proposal just prior to leaving office was for additional $2,000 to every American. Biden simply followed through which most of what the former President wanted, thought thwarted a bit by Congress.) STORY

    If you like broad diversification, real assets (hard assets + real estate) can play a small part in a diversified portfolio. (I have 10% in the 4 funds listed). However, some folks seem do do very well focusing alone on equities - maybe even “SPACS”.

    Whatever floats your boat ...:)
  • I decided in February to put a little weight in commodities. Chose a broad basket ETF for that bet, DBC. It's been up and down and I haven't made much on it yet, but I do think there is merit in owning for the next few years.
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