Commodities Might Be A More Attractive Way To Profit From An Economic Recovery Than Stocks

Commodities Might Be A More Attractive Way To Profit From An Economic Recovery Than Stocks
Stéphane Renevier, CFA

about 3 years ago1 min

  • This chart shows the ratio of commodity prices (like oil and gold) to stock prices, on average; when it’s high commodities prices are outperforming stocks
  • It highlights the current disconnect between financial assets like stocks and real assets like commodities
  • Financial assets have benefited from central banks effectively printing money to support the economy, while real assets have suffered as that support, so far, hasn’t helped improve the real economy enough
  • Why should I care? Most investors do expect the economy to pick up, and that’s already reflected in stock markets that are near record highs – while commodity prices haven’t had the same boost so far and might yet benefit from increased government spending
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