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GSG

Potentially undervalued counter-cyclic asset classHello, Thanks for viewing. Really nice to see the encouragement and feedback from my last post about the gold/silver ratio. This is to share another of my recently entered, but shortly to grow significantly in size, positions. Boring old Commodities. If you look at a long-term chart, commodities have been on a largely downward slide for over 29 years. I just looked up a 100 year Commodities chart and had a chuckle reading how a blogger was calling the bottom on commodities in 2017 when the index was around 40% higher than now (blog.gorozen.com). So, I realise that it is unlikely that I started looking into commodities right at the bottom of the market. Still, there are good reasons to be a buyer. 1. From TA, it looks like we are nearing a bottom. I would tentatively put it between $5.40 and $3, however, things can change quickly and I decided to start creating a position, 2. I like Ray Dalio, I like him so much I have invested into GSG despite overall very negative outlook on ETFs (please please don't invest in GLD). So Ray Dalio was talking on a YT video with Tony Robbins (yeah the guy with the huge teeth) about his all-weather portfolio. Since, in early 2019, I was trying to find a way to "recession-proof" myself in expectation of a recession (The US was nearing its longest and weakest expansion in history with rather high debts - I never would have guessed that in a recession that already overvalued stocks with no chance of producing a dividend return would become the stock-market darlings). Check out the basics of his portfolio here: www.lazyportfolioetf.com Now, I haven't done all of it and I probably won't. I started with stocks (up to 30%), Precious metals (supposed to be 7.5% but I have replaced a significant portion of the bonds in the portfolio with precious metals - because of the negative real return of treasuries. I have posts about the S&P500, Shiller 10 year PE ratio, and my treasuries entry - which would have been in Oct 2018 - if I did pull the trigger. At the time, I thought the bonds return was too low to warrant an investment... turns out 3% wasn't that low after all. Long story short, I am probably 30% precious metals, 10% bonds, 30% stocks, <1% GSG but adding more up to a goal of 7.5%, the rest is cash looking for a home in income-producing real assets at some future date (and some crypto). I am buying, even though I think we aren't yet at the bottom, just because of how difficult it is to pick the low point in the market. Commodities have bottomed out in 1929 (that seems a significant date), the mid to late 1960s, and a 10 year down-trend pulled back around 1998-9. I am especially interested in the 1929 bottom, that happened around the time equities reached all-time high valuations in terms of PE and Market Cap/GDP (of course these have been exceeded in the current market). I feel we are approaching a 1929 type of moment. There are some interesting things happening of late; massive demand increases and shortages for both physical bullion and lumber (lumber isn't on the ETF) as people move away from intangible assets and populated main centres etc. There is a very real possibility that people will look to other tangible things, things with inherent value, should paper assets and a vast array of financial derivatives blow up (again). Add in the Fed's goal to stoke inflation (and then stop it again when it reaches its target) and we have at least a possibility, an outside chance, that Commodities will be valued higher. I'm sure I had more to say, but I am watching the Dow drop like a stone. Protect those funds
AMEX:GSGLong
by flyinkiwi10