Oil & The dollar
Commodities are a major hedge against inflation and as a recent article in the Wall Street Journal points out, as the dollar
continues it ‘drop’, the price of oil will naturally rise since oil is bought and sold in dollars. Why do I say all of this? If you are concerned about the dollar becoming worth less money and inflation approaching, commodities make up an important part of your portfolio. In fact, the 38 year historical analysis for commodities is the same as small companies that give investors the most return–albeit with the most risk. Finally, notice how the price of oil in this article is also shooting up because of a Hurricane and the worries about potential damage.
Final Note: As we can see, prices are impacted by peoples emotions, weather, unknown world events and a host of other things that we have no control over. Stop trying to guess and stop using mutual fund and active managers that believe and tell you they can spot winners. It can’t be done consistently & predictably.
