Five Commodity Investments to Buy for Profiting Despite Inflation

Five commodity investments to buy for profiting despite inflation offer an opportunity find refuge when much of the market has been pulling back.

Investors may want to diversify into copper and gold, among other metals, after the recent rise in the share prices of oil stocks that could be nearing a short-term peak, according to a new analysis from BofA Global Research. Gold appears to be shining more brightly and is showing signs of recovering after it topped out at $2,078 per ounce in August 2020.

With oil prices topping $92 per ounce for WTI Crude, BofA wrote that investors may want to scale back on their ownership of black gold and increase their holdings in gold and other metals that are showing signs of appreciating. The appeal of gold will shine even more if it breaks above $1,860-$1,880 per ounce, according to BofA. The price of gold is $1,872.00 as of this writing, so gold is not far from exceeding that threshold.

Consumer prices, including oil, have soared at the fastest pace in the past 40 years. The U.S. Labor Department reported on Thursday, Feb. 10, that prices in January 2022 were 7.5% higher than a year ago. It marked the biggest jump in prices since 1982.

Five Commodity Investments to Buy Could Be Affected by Russia

Oil prices have risen in recent weeks as the number of Russian troops along the border of Ukraine have surged from roughly 130,000 to more than 150,000 on Feb. 15. U.S. President Joe Biden and other U.S. officials have urged all Americans to leave Ukraine immediately.

Claims by Russian President Vladimir Putin and the Kremlin on Feb. 15 that the country was withdrawing some troops from near Ukraine’s borders could not be “verified,” President Biden said. Media reports indicate Putin has told his military forces to be ready to invade by Wednesday, Feb. 16, but it is unclear if he has decided to attack Ukraine, Russia’s mineral-rich neighbor.

Ukraine’s President Volodymyr Zelenskyy has called for a National Day of Unity on Feb. 16. Meanwhile, Putin is insisting that the United States and the North Atlantic Treaty Organization (NATO) agree to deny Ukraine membership in the military alliance, regardless of what its citizens want. News reports about a series of cyberattacks on Ukrainian army websites on Feb. 15 suspected Russia as the culprit, its defense ministry and major banks.

Five Commodity Investments to Buy for Profiting Feature Freeport-McMoRan

With Ukraine’s economy and production of minerals imperiled by Russia’s threats, the price of commodities could be pushed upward if the supply is trimmed. The situation has not gone unnoticed by investment leaders.

Mark Skousen, PhD, the leader of the Forecasts & Strategies investment newsletter, as well as the Five Star Trader, TNT Trader, Fast Money Alert and Home Run Trader advisory services, recently recommended a giant international copper, gold and oil producer. With the price of copper, gold and oil climbing, Skousen expects FCX to climb. Plus, the stock is selling for only 12 times expected earnings and its dividend recently was increased.

Chart courtesy of www.stockcharts.com

Zacks’ Research Daily reported on Feb. 14 that shares of Freeport-McMoRan have gained 6.9% in the last three months, compared to a loss of 8.3% in the Zacks Mining – Non Ferrous industry. The Zacks forecast is that Freeport’s initiatives to reduce debt will aid its financial position.

Freeport is conducting exploration activities near its existing mines with a focus on expanding reserves to support additional future production capacity, Zacks reported. The mining company further is well-positioned to benefit from automotive electrification, which is positive for copper, since electrical vehicles are copper intensive.

Five Commodity Investments to Buy for Profiting Aided by Rising Copper Prices

“Higher copper prices also are expected to support margins,” Zacks concluded. “FCX’s margins are likely to be further supported by reduced interest rates.”

Barron’s magazine reported on January 14, 2022, that miners are off to a strong start in 2022 and Freeport-McMoRan could be the “big winner.”

“With the price of copper, gold and oil climbing, I expect FCX to renew its upward trend,” wrote Skousen, who has been named as one of the world’s Top 20 living economists by www.superscholar.org. “It is selling for only 12 times expected earnings and recently raised its dividend.”

Mark Skousen, a descendant of Benjamin Franklin, meets with Paul Dykewicz.

Five Commodity Investments to Buy for Profiting Include Rio Tinto

Goldman Sachs is forecasting a “commodities supercycle” that would feature a boom in industrial commodities such as copper, iron ore and minerals that potentially could last for decades. The prediction is gaining supporters.

Jim Woods, who writes the Successful Investing and Intelligence Report investment newsletters, as well as heads the Bullseye Stock Trader and High Velocity Trader advisory services, agrees with Goldman Sachs’s analysis. Woods wrote to his Bullseye Stock Trader subscribers recently that he liked the investment firm’s view that “copper is the new oil.” 

Copper prices have surged to $4.50 per pound and could move higher to spur new infrastructure spending around the globe, Woods wrote. Plus, copper is indispensable in global decarbonization strategies, he added.

Among the many ways to take advantage of the boom in copper and industrial metals, Woods highlighted Rio Tinto PLC (NYSE: RIO), a global mining giant that searches for, and extracts, a variety of minerals from places such as North America and Australia. Iron ore is RIO’s dominant commodity, with lesser contributions from copper, aluminum, gold, industrial minerals and even diamonds, he added.

Chart courtesy of www.stockcharts.com

“I am old enough to recall the company’s 1995 merger of RTZ and CRA, via a dual-listed structure, which created the present-day RIO,” Woods wrote to his Bullseye Stock Trader subscribers. “Today, the two operate as a single business entity. So, what’s so special about RIO?”

Rio Tinto Stands Out Among Five Commodity Investments to Buy

Rio Tinto is in the top 1% of all public companies in terms of earnings per share (EPS) growth over the past several quarters and several years, Woods wrote. Last quarter, the company grew its EPS by 156% year over year. The company is scheduled to report its latest results on Feb. 16. 

“As for share price performance, RIO has really shown its mettle over the past three months, as the share price has spiked nearly 30% over that period,” Woods pointed out. “Over the past 52 weeks, RIO remained in the top 13% of all public companies in terms of relative price strength.”

On a technical trading basis, RIO shares now are breaking out to new 52-week highs after forming a very bullish cup-with-handle chart pattern, Woods observed. 

Jim Woods and Paul Dykewicz discuss stocks to buy now.

Pension Fund Chair Chooses Three of Five Commodity Investments to Buy 

Bob Carlson, a pension fund chairman who also leads the Retirement Watch investment newsletter, said he recommends investing in three funds that offer exposure to commodities. One of them is a current recommendation in his Invest with the Winners portfolio from the Retirement Watch newsletter.

That pick is Invesco DB Commodity Tracking (DBC). DBC is up 8.15% over the last four DBC weeks. It is up 9.87% for the year to date and 44.59% over 12 months. 

Carlson monitors several models that try to identify from among a diversified group of exchange-traded funds (ETFs) the one that has strong recent returns and is likely to continue earning above-average returns for at least another month.

“Each month, the portfolio is positioned in either one ETF or cash,” Carlson wrote. “The strategy, on average, makes a trade every two to three months, though in 2020, it held a gold ETF for most of the year.”

Chart courtesy of www.stockcharts.com

Five Commodity Investments to Buy Include Inflation Hedge

A recommended basket of inflation hedges is offered through DWS RREEF Real Assets (AAASX). The fund diversifies among gold, broad commodities, real estate investment trusts (REITs) and Treasury Inflation-Protected Securities (TIPS).

It tactically changes the allocation among these sectors with changes in the economic cycle. It also changes the holdings within those broad sectors based on detailed reviews by its analysts, Carlson counseled.

The fund is down 2.32% in the last four weeks, 0.23% over three months and 2.54% for the year to date. But it is up 19.49% over 12 months.

Pension and Retirement Watch chief Bob Carlson takes questions from Paul Dykewicz.

Gold started 2022 better than it ended 2021 but still hasn’t established the positive breakout Carlson said he expected to occur amid rising inflation. Threats of international conflicts also should boost gold’s price, as should a decline in the U.S. dollar, Carlson continued. 

Chart courtesy of www.stockcharts.com

Five Commodity Investments to Buy for Profiting from Inflation Include IAU

Carlson also recommends iShares Gold Trust (IAU) as a “very liquid, low-cost way” to invest in the precious yellow medal. IAU is down 0.38% in the last four weeks and 0.85% so far in 2022. But it is up 0.85% over three months and 0.61% over 12 months.

Gold is a traditional hedge against inflation. IAU is showing signs of rebounding and now could be a good time to buy, Carlson counseled.

Chart courtesy of www.stockcharts.com

COVID-19 Concerns Lead CDC Director to Encourage Indoor Mask Wearing

New COVID-19 cases and hospitalizations are on the wane, but more than 2,000 Americans still die each day from the virus. As of Feb. 15, the United States was averaging 151,056 new COVID-19 cases, according to Johns Hopkins University.

It marks a 44% drop but from last week, as new cases have fallen to one-fifth of the high of 800,000-plus cases per day a month ago. Nonetheless, the chief of the U.S. Centers for Disease Control and Prevention (CDC) is standing by the agency’s indoor mask-wearing guidelines, advising not to change the recommendations or loosen restrictions aimed at curbing COVID-19. CDC Director Dr. Rochelle Walensky is urging students to wear well-fitting masks indoors consistently at school, along with people in public indoor settings amid high or “substantial transmission.” 

The continuing COVID-19 threat is leading many people in America to obtain COVID-19 boosters. However, more than 60 million people in the United States remain eligible to be vaccinated and have yet to do so, said Dr. Anthony Fauci, the chief White House medical adviser on COVID-19.

COVID-19 Cases Worldwide Top 415 Million and Cause 5.8 Million Deaths

As of Feb. 15, 252,277,758 people, or 76% of the U.S. population, have received at least one dose of a COVID-19 vaccine, the CDC reported. Those who are fully vaccinated total 214,104,148, or 64.5% of the U.S. population, according to the CDC.

COVID-19 deaths worldwide, as of Feb. 16, topped the 5.8 million mark to hit 5,837,873, according to Johns Hopkins University. Worldwide COVID-19 cases have soared past 415 million, reaching 415,508,449 on that date.

U.S. COVID-19 cases, also as of Feb. 16, topped 78 million, totaling 78,038,251 and leading to 925,441 deaths. America has the dreaded distinction as the country with the most COVID-19 cases and deaths.

The five commodities investments to buy for profiting despite inflation are well-positioned for those seeking to acquire shares before their prices surge. However, investors need to understand that uncertainty about whether Russia may invade Ukraine exposes investors to potential volatility beyond their control.

Paul Dykewicz, www.pauldykewicz.com, is an accomplished, award-winning journalist who has written for Dow Jones, the Wall Street Journal, Investor’s Business Daily, USA Today, the Journal of Commerce, Seeking Alpha, GuruFocus and other publications and websites. Paul, who can be followed on Twitter @PaulDykewicz, is the editor of StockInvestor.com and DividendInvestor.com, a writer for both websites and a columnist. He further is editorial director of Eagle Financial Publications in Washington, D.C., where he edits monthly investment newsletters, time-sensitive trading alerts, free e-letters and other investment reports. Paul previously served as business editor of Baltimore’s Daily Record newspaper. Paul also is the author of an inspirational book, “Holy Smokes! Golden Guidance from Notre Dame’s Championship Chaplain,” with a foreword by former national championship-winning football coach Lou Holtz. The book is great as a gift and is endorsed by Joe Montana, Joe Theismann, Ara Parseghian, “Rocket” Ismail, Reggie Brooks, Dick Vitale and many others. Call 202-677-4457 for multiple-book pricing.