Commodities vs. the rest

Commodities vs. the rest Thursday, July 3, 2008

Posted by ei-forum in Commodities, Interesting Charts.
trackback

Nothing new but we thought that this was an interesting char to post in order to visualize the extreme run that oil and overall commodities have had in the past 2 years.

We have used ETFs for this graph- please click on the graph to enlarge:

- PowerShares DB Commodity Idx Trking Fund (DBC)

- iPath S&P GSCI Crude Oil Tot Ret Idx ETN (OIL)

- Vanguard Total Stock Market ETF (VTI)

- Vanguard Total Bond Market ETF (BND)

- Vanguard Small Cap Value ETF (VBR)

- Vanguard REIT Index ETF (VNQ)

Naturally, the question is how long will this last? Sooner or later things will have to turn around and it is precisely in these times that we have to take a long-term view. To confirm this, most of the top ranking value oriented money managers are claiming that it has been years since they have seen these many opportunities in the market place. Having said this, it also means that there is risk so make sure you stay away for things you can’t understand and focus on solid businesses which will come back once the economy turns around.

If you want to have an idea of what the top value guys are buying, have a look at GuruFocus, it’s a great place to get investing ideas: link.

Please read our disclaimer.