When new to the investment market and choosing to invest for the first time, surface interpretations might edge you towards technology industries and consumer goods, as these are the ones that get the most attention from stock investors.
However, logic and hard data available in recent reports offers a different analysis. Technology products and consumer goods are only made possible thanks to basic, raw materials, which is why commodity stocks within the metal industries are prime candidates for top investment opportunities in 2017.
The Current Climate
According to a commodities investment article published by Barron’s, industrial metals are set to deliver their best annual performance in years during 2017. Further analysis of raw material investments including energy, agriculture and metals – listed on the S&P Goldman Sachs Commodity Index – reveals a 25% rise in performance so far this year, setting 2017 up as the best year for annual gain in metal commodities since 2009. See Also: How to Invest in Water Like Dr. Michael Burry from The Big Short.
The plans that form part of the U.S.’s current administration proposals are likely to fuel a greater demand for non-precious industrial metals, such as copper and aluminium. Bob Haberkorn, a senior market strategist at RJO Futures, believes that increasing demands from the two largest economies in the world, the U.S. and China, will bring about a positive and stable rise for metal commodity investors who choose to enter the market in 2017.
The Particularity of Titanium Commodities
Surprisingly enough, titanium commodities are also showing signs of strength this year. The interesting thing about titanium is that the scope for investment is broader than most people new to the industry might think. Common thought dictates that suitable titanium companies to invest in are related to mining or aerospace supplies, but that simply isn’t the case.
There are many investment opportunities available through companies who use titanium to make everyday products. Titanium tubing used in sports equipment is one example, yet paints, sunscreens and a range of cosmetics also make expert use of titanium in more ways than you might imagine. Over 90% of all titanium ore is used to produce titanium dioxide, which just happens to be what many sunscreen companies use to prevent harmful UV rays from damaging our skin.
Gold experienced an impressive rally during the first six months of the year, resulting from the chaos that ensued after the U.K.’s Brexit vote, which did nothing but boost its appeal. However, since the U.S. election, this precious, yellow metal has fallen, proving its instability against its non-precious counterparts. The problem with gold is that just like oil it’s priced in U.S. dollars and so fluctuates as currencies rise and fall.
Sudden changes to the political climate always create turmoil across the markets and 2016 happened to be a year of great political change with events in the U.K. and the U.S. topping the bill. Decisions made by the Federal Reserve and OPEC further agitated investments, meaning that investors experienced a rather unstable and unpredictable start to 2017. At times like this, the advice of the famous investor, Howard Marks, comes to mind: “Move forward, but with caution”.
So, make a beeline for this year’s “safe haven” assets by having a little faith in the performance potential of industrial metal commodities.