Most hated asset class

I have spent all my life, pointing to the possible risks – in our economy, the real estate market and the stock market. Only too often we pay the safety of our assets, keeping unnecessary chances.

But sometimes it is necessary to consider the other side of the coin, and the risk / reward. Every asset has a buyer – if the price is low enough.

And I think that this is where the market works with a large number of goods.

All the matter in the risk / reward.

Real estate prices are too high. Even insiders at the Fed say that there is a bubble in commercial real estate. And you have heard a lot from us and others about the stock market problems.

When it comes to risk than reward in these two sectors, well … part of the "remuneration", after profit more than six years, approximately once in the morning was used as a bottle of champagne after the New Year.

Case by goods

The goods – the other side of the coin of assets. Of course, oil prices have doubled since the beginning of the year, and prices for precious metals increased by around 20%, but none of them reached their highs even a few years ago. The rest of the commodity complex is a similar bag of results in 2016:

  • Copper + 1%

  • Soybean: + 8%

  • Wheat: -15%

  • Corn: -8%

  • Sugar: 50%

  • Nickel: 20%

And look at any price index tracking products or the stock exchange, and you'll see what I mean. For example, tavaravy Dow Jones index increased by only 23% since falling down at the beginning of the year (primarily due to rising energy prices). But it has dropped by more than 30% from 2014.

It may seem strange to point to the asset class, which is of low quality and say "put the money there," but it is so worth a look to the commodity sector.

This makes it possible to diversify part of their wealth at the expense of stocks and property. And best of all, that the goods are not related – it means that they do not move to the same drummer, going down and down in price – as stocks and real estate.

But there is another way to think about all this. For example, peragortka home and a day trade is back in vogue. But tell me, "I like corn This is the cheapest price for ten years.", And all you hear – it sounds of silence (and possibly crickets).

Nevertheless, there is a downside to the old adage that "the best cure for high prices – high prices." The best cure for low prices for goods in the commodity complex? Yup – low prices. And it's leading manufacturers, miners, and other manufacturers, which are waiting for recovery, waiting for demand reemerged.

For example, farmers in Texas in the autumn planting is 20% less wheat (after reduced plantings by 13% in the same period last year).

If we are talking about the risk compared to the reward, you can not find the asset class to which your neighbors and friends cocktail more indifferent than goods. It's a good thing. If an asset is unpopular and even hated, it means that there is the potential for profit. The same can not be said in general about the shares and the real estate at the present level.