Rising Commodity Costs: Do You Complain or Rejoice?

JC Parets
March 1, 2022

As investors we get the option.

You can either profit and help your family because of higher energy and commodities costs.

Or you can complain about it.

I've been through enough cycles at this point, that there will always be that group who just complains and complains.

But for those of you who are proactive, and took advantage of the trends in place, then there's really nothing to complain about.

To the contrary, these are great days! Some of the best days, in fact.

It's funny, because you have those people who bought into that scam of so called "passive" investing. It's ridiculous that some investors still fall for that old trap.

Just because you buy and hold major indexes doesn't make you a "passive" investor. You have to be really really really bad at math to believe that.

By owning major indexes, like the S&P500 or Dow Jones Industrial Average, you're just as active as the rest of us. It's just that you're letting those rocket scientists at Dow Jones make those allocation decisions for you.

And they don't even know you. They know nothing about you. They're just doing whatever they think will help them keep their jobs.

Your objectives and needs are the last thing on their minds.

So if you fell for that scam of "passive" investing, there still might be time.

Take a step back. Is this what's happening? You're still letting index providers give you 2% energy exposure? Or in the case of the Nasdaq100, 0.00% Energy and 0.00% Materials....?

That's NOT passive investing. You're just letting some random people in cheap suits decide your allocations for you.

Once you come to this realization, you can add or remove exposure with the click of a button. It's really not that hard.

Many of you are financial advisors and do a great job at adjusting those allocations accordingly. I know because you tell me. So kudos to you!

Just because 40% Technology exposure and 2% energy worked well over the years, doesn't mean it will continue to work.

Wait, did you actually think it would?

Here is the Oil & Gas E&P Index $XOP breaking out to new multi-year highs. This is while people are talking about bear markets in stocks, and wars and some of those worst sentiment we've seen in over half a decade:

New highs are not characteristics of downtrends.

And it's not just Energy. Regional Banks went out today at the highest monthly close in history.

It's Value in general.

Check out the Growth Factors relative to Value.

Are these the charts you want to buy?

Because these are the charts your index providers are making you buy. If you own the S&P500 or Nasdaq100 or DJ Industrial Average, you're betting that these lines all of sudden start going up out of nowhere....

Is that the bet you're making, because someone once convinced you that passive investing was actually a thing?

It's not.

It's not even close.

We'll be discussing all of this, and more importantly what we're doing about it, on tomorrow night's Live Monthly Charts Strategy Session!

You don't want to miss it.

Premium Members make sure you register for that here, if you haven't already. And if you can't make it live, the video replay and slides to download will be made available here shortly after the call.

See you then!

 

 

 

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