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Energy, Commodities, and Your Portfolio


Last week we wrote about the possibility that commodities as investments may be looking better soon.  Oil and gas, metals, food, and general commodities are volatile, and have been trading in their low range for some time. No one can say for sure when they will become hot items again.

But, there are some signs that their time may be coming.  Market forces are very robust in the commodity arena.  When commodity prices are low, as they have been lately, consumers buy more and use more (i.e., gasoline).  But, as those prices were falling, producers were cutting back.  We see evidence in the decreasing numbers of drilling rigs and in layoffs from the oil fields.  As the supply surplus is reduced, the market will eventually regain equilibrium (supply = demand).  If the behavior continues, prices will rise.

News stories about falling supplies, rising inflation, and sharply increasing world demand for energy are appearing daily.  No one can predict the exact date or price at which oil prices or gasoline prices will bottom out.  Both are off their recent lows, and it may already have hit bottom (for this cycle, at least).  I am now ready to discuss slowly re-entering the commodities asset class over the next few weeks.

At the end of this month we will be sending postcards to remind our clients to schedule meetings.  In the interim, anyone who would like to discuss this or other issues, please call us at the office (904-685-1505), or book an appointment with us using this link.

Remember to listen to The Van Wie Financial Hour every Saturday morning from 10:00 to 11:00 on AM600 and FM100.3, The Answer.  On your computer, go to wbobradio.com and click on “listen live.”  After the fact, you can hear the podcast by going to our website, then clicking on the "Radio Show & Podcasts" tab.  You can also download the mobile app “wbob” or find the station on “Tunein Radio” or other streaming services to listen live from anywhere.