Commodity-based companies and associated ETFs re critically important as a gauge of economic health and demand, inflation and should be important additions to most investment portfolios. Underlying commodity prices can be affected by many factors including the level of the U.S. dollar which can depress prices when strong. With inflation pressures waxing and waning, many believe it's important to have exposure to commodity oriented stocks and ETFs. Even if underlying commodity prices rise, commodity related common stocks and linked ETFs may or may not follow suit. This makes investment timing that much more important.
We feature a technical view of conditions from monthly chart views. Simplistically, we recommend longer-term investors stay on the right side of the 12 month simple moving average. When prices are above the moving average, stay long, and when below remain in cash or short. Some more interested in a fundamental approach may not care so much about technical issues preferring instead to buy when prices are perceived as low and sell for other reasons when high; but, this is not our approach.<READ MORE>