Just like That '70s Show, commodities are bringing the past back into vogue. We've seen oil gush to $55 a barrel and gold regain its luster by moving above $420 an ounce. And despite low interest rates and the reluctance of the Federal Reserve to admit inflation is nowhere on the horizon, the Commodity Research Bureau Index has risen some 51% over the last two years. With the stock market as measured by the S&P 500 having suffered through a wild five years and showing barely positive returns during that period, investors are looking at alternative asset classes to boost returns and round out their portfolios. The fact that the major futures exchanges have enjoyed record trading volume and that the price of a seat on the New York Mercantile Exchange, where oil trades, at $2.2 million dollars, has eclipsed the cost of membership on the New York Stock Exchange are testaments to the growing interest and value of products.
The King of Commodity
This afternoon I had the pleasure of listening to Jim Rogers, the legendary investor, world traveler and author of the recent Hot Commodities. Rogers is steadfastly bullish on commodity prices, saying "the bull market in stocks and bonds is over and we are now just two years into what should be a 10-15 year bull market for commodity prices."