While both of these ETFs are down with the prices of commodities, it may be time to plan ahead and start dipping your toes into this sector—before prices begin to rise.
PowerShares DB Agriculture (DBA) and PowerShares DB Commodities (DBC)
from Nate’s Notes
Updated from Investment Digest 761, September 17, 2014
While it is still too early to call the downtrend a thing of a the past, I do take some comfort in the fact that shares of both PowerShares DB Agriculture (DBA) and PowerShares DB Commodities (DBC) seem to have found at least a bit of traction after stumbling so badly in the first quarter of 2015.
As discussed a number of times before, I continue to believe that, at some point, we are going to see a dramatic uptick in commodity prices, but I will also be the first to admit that, at least for now, my predictions on this front have been dead wrong.
To be sure, there are a lot of variables at play, and it is still way too early to close-up shop and declare the case closed when it comes to all the money that has been printed by central banks around the world over the past several years (or decades, depending on how much of a skeptic you want to be).
For the time being, these two ETFs are still intentionally the smallest positions in both Portfolios, but they both also represent a small piece of insurance that I will most likely start to aggressively add to if/when commodities do start to tick up again. Consequently, those of you who have a hard time “buying strength” may want to make sure you own at least a small position in both of them ahead of time as well just to make it easier to pull the trigger when the time comes to start “averaging up.”
DBA remains a buy under $24. DBC is a buy under $19.
Nate Pile, Nate’s Notes, www.NotWallStreet.com, 707-433-7903, May 8, 2015