Commodities > Stocks > Bonds

JC Parets
April 5, 2024

How I learned it more than a couple of decades ago was that there were 3 asset classes: Stocks, Bonds AND Commodities.

But a funny thing happened throughout the 2010s. Commodities did so poorly, particularly when you compare their performance to Stocks and Bonds, that investors completely forgot that Commodities were an asset class.

Many newer investors never even knew in the first place.

But yes folks, there are 3 asset classes. And that 3rd one that everyone conveniently forgot about is the one that is dominating returns this cycle.

Here is a ratio of Commodities to Bonds in a strong uptrend as everyone keeps telling me that interest rates are falling.

It's actually the exact opposite. Interest rates keep going up, as Commodities rip higher and bonds keep falling apart.

You're going to tell me this isn't an uptrend?

But here's the big one.

We've been pointing to the possibility for Commodities to really rip vs stocks, but now we're seeing it.

Yesterday we went over the energy components relative to stocks.

But here's the entire CRB Commodities Index relative to the S&P500 putting in, what we like to call a, "Scoop & Score":

Look at how the ratio between Commodities and Stocks briefly fell below the 61.8% retracement of the entire rally off the Covid lows.

And notice how quickly it recovered.

I believe the squeeze is on.

Commodities are King this cycle.

Are you going to bet that changes?

Or are you betting this trend strengthens?

We just put on a monster bet that gives us leveraged Energy exposure at a very low cost. Members of All Star Options can get those details on the trade ideas page.

If you do not have access to All Star Options, you can sign up here RISK FREE or you can contact Mary for more details or discount offers she may have available.

See you in there!

JC

 

Looking For 30x Return?

It's still live, and it's getting even better. Did you see what crude oil did on Thursday? Yeah, it's an energy trade, but there's an income part too. And the upside potential is almost embarrassing: 30x. Check it out, risk-free...

 

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