| The Most Hated Asset Right Now | | By Dr. Steve Sjuggerud | | Thursday, January 25, 2018 |
| Everything's up!
Heck, everything is up a bit too much lately, right? People are starting to feel good about their investments again...
Is there any sector or asset that hasn't soared?
Actually, yes...
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While stocks have soared seemingly nonstop for years, this major investment class has performed downright terribly. Take a look:
| Year | Return | | 2011 | -10.7% | | 2012 | -3.2% | | 2013 | -13.2% | | 2014 | 2.6% | | 2015 | -17.2% | | 2016 | -3.1% | | 2017 | -6.1% |
In six of the last seven calendar years, this investment has lost money.
And in 2014 – the one year that it managed a positive gain – it only went up 2.6%.
While stocks have absolutely soared, this investment has lost nearly half its value since its 2011 peak.
What is this asset class? It's agricultural commodities
Specifically, those are the returns for the PowerShares DB Agriculture Fund (DBA).
It holds a broadly diversified portfolio of agricultural commodity futures. Here's the latest breakdown of its top holdings:
| Commodity | Weight | | Soybeans | 12.9% | | Corn | 12.7% | | Wheat | 12.5% | | Live cattle | 12.5% | | Sugar | 12.0% | | Coffee | 10.9% | | Cocoa | 10.2% |
You might imagine – after seven years of bad returns – that investors have given up on these commodities. You would be right...
Jason Goepfert of SentimenTrader.com does excellent work analyzing investor sentiment. And these days, basically all these agricultural commodities are at the bottom of his scale.
Nobody likes them... And that gets me interested!
I love to buy what's cheap and hated. It's incredibly challenging these days to find an asset class that fits both.
But after a severe seven-year bear market, agricultural commodities might just be the most hated asset class.
They are cheap. They are hated. They are just missing the final piece before I'll pull the trigger... We don't have a real "uptrend" in sight – yet.
Everyone has given up.
This is the position where big gains start.
I'm not bold enough – yet – to be a buyer. But I will be a buyer when we finally see an uptrend.
If you're looking for a hated asset that can rise whether stocks are going up or down, then you'd better put agricultural commodities on your watch list.
Shares of DBA are the easiest way to play it, once the uptrend finally returns...
Good investing,
Steve |
Further Reading:
Commodities are incredibly cheap relative to stocks. And this rare extreme could lead to big gains, based on history... "We may be in the early stages of another multiyear boom," Justin Brill says. Read more here: This Notoriously Cyclical Sector Is Starting to Boom. |
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THE BIG BANK RALLY MARCHES ON
Today's chart highlights the strength of the banking industry... Longtime readers know we like to check in on America's big banks from time to time. Firms like JPMorgan Chase (JPM), Wells Fargo (WFC), and Bank of America (BAC) are America's "financial backbone." They rise and fall with our country's ability to make money, save money, service debts, and generally "just get along." Today, we look at another major player in the industry... Morgan Stanley (MS) is one of the biggest banks in the U.S. For more than 80 years, it has been a wealth-management leader – and it's still going strong. Last week, the company beat analysts' expectations for quarterly sales and profits... Plus, clients are entrusting it with more of their hard-earned cash. Its Wealth Management business now oversees $2.4 trillion in assets... And revenues for that division grew nearly 10% since last year. As you can see in the chart below, shares are now up around 40% from their May lows. They recently hit a fresh 52-week high. This banking giant is more proof that money is flowing in America... |
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| A one-click way to bet on oilfield-services companies as oil prices move higher... The long-term future in commodities is bright. And oilfield-services stocks are likely to benefit as the uptrend gets underway... |
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| The Best, Safest, and Surest Way to Get Rich in Stocks | | By Porter Stansberry | | Wednesday, January 24, 2018 |
| | Even if there is a bear market, and even if the markets as a whole end up down for the year, you could still make a lot of money... |
| | A Huge Rally and an Even Bigger Collapse | | By Porter Stansberry | | Tuesday, January 23, 2018 |
| | Some powerful underlying forces are moving the market right now. They will play a huge role this year... |
| | Negative 4.6% a Year – the Likely Seven-Year Real Return on Stocks | | By Dr. Steve Sjuggerud | | Monday, January 22, 2018 |
| I've been a big cheerleader for this bull market since its start in 2009. So what I'm about to say might surprise you... |
| | The Warning Signs Are Mounting... A Correction Is Inevitable | | By Justin Brill | | Saturday, January 20, 2018 |
| | The market is getting "stretched"... |
| | How to Ride out a Correction Like a 'Market Stoic' | | By Dr. David Eifrig | | Friday, January 19, 2018 |
| | You can't get through life without accepting the things you can't change during hard times... |
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