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Commodities: Time to Buy When Others Are Selling?

By Advisor Perspectives
Capital Markets

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As outflows increase, oil fundamentals are strengthening

As I travel around the country to meet with institutional clients, I often hear this question: “What is everyone selling? Because that’s something I’m really interested in buying.” These are clients who have the confidence and experience to contradict the herd mentality that causes many investors to chase market returns (which often results in buying near market tops while selling near market bottoms).

That question is my cue to start talking about commodities.

In a recent blog, I encouraged investors to stay focused on commodity fundamentals, which have improved dramatically over the past few months. But investors seem to have been distracted by the short-term price volatility in energy markets this spring.

  • Figure 1 shows a new wave of selling in commodity exchange-traded funds (ETFs) since March, while at the same time the oil price has stayed within its recent range.

Read more at Advisor Perspectives.

Photo: Paul Lowry

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