Little has changed since my February column about thinking long-term.
Yes, markets have gone up, some down, but the idea remains that now is still the time to be investing in the markets, especially the commodities that lag more than obvious investments.
The reason is that companies have to divest themselves of their overstocked inventories, and those companies that use them to make their specialties have to reorder and take delivery. Then as time goes on, and the demand increases, prices of those companies will rise in the market place. If you hold commodities now, do NOT dispose of them. Rather, add to your positions.
If you don't hold commodities, by all means get into them before they soar into the ether. I'm talking about commodities of all sorts. They are very cheap now as those of us who have fear and trepidation will once again miss out if they are not purchased (or held) now. Don't miss the boat this time. Once this economy really gets to rolling, it will be too late. If you have, hold; if you haven't, buy.
An interesting situation has arisen this past quarter, one that was not expected or anticipated, namely that although earnings were higher in many corporations, total revenues were less. It means that the smart companies were making more money by spending less of revenues. Doesn't always happen that way, but it was beneficial to owners of the stocks. I heard today that roughly the same amount of paper was produced in Wisconsin now as it was 30 years ago, but it cost half as much to produce it. Computers, robots, are quite handy. Nice to own.
As many years ago as two to three, I have been spouting about the dangers of rising inflation and what it would do to the value of the dollar (lessen it) and how it would raise the value of silver, gold and metals (increasing them). Well, it isn't here yet. Or is it?
What was the price of gasoline three four years ago, what was the price of food, what was the price of airline travel, what was the cost of just about everything? Higher or lower than now? It didn't hit everything but enough to make it noticeable. It will worsen over time. Count on it.
Having doused the economy with all the QE's (quantitative easing, as it is called), you can't have that much cash around and not be willing to spend it. Got gold? Got silver? Got copper, aluminum, agriculture products? I shake my head and wonder what the price of gasoline will be in the coming years. You might not need it for yourself, but your heirs might. It's very simple to invest in the shiny stuff, so don't let its recent decline fool you. It only goes down so the smart money can get in on it at a lower price.
Did you ever notice that when the markets get too high, the news comes out that it is going to decline and you had better sell rather than watch it go down? And in a few weeks or perhaps months it starts going back up and everyone tells you to buy? That's just pure phooey, so give it the longer time and you will win more times than not. Whoever sells in panic, seldom gets back in at the bottom. They either wait too long or never get back in and lose. Don't put it off. Take advantage of the recent drop here, and get in while you can.
Speaking of the long term, remember that commodities are strictly supply and demand. There is a continuous stream of use for most commodities. However, once in awhile, economies fall to the specter of the economic cycles that are indicators of human nature to go too far one way and too far the other. Timing is important. Like now, the timing of many cyclical commodities are much lower than they will be when the demand for them returns. Think about what and how much you want to invest and get it done.