The prices of commodities such as oil and gold are weighing down this ETF, but now may be the time to conservatively add some shares to your portfolio.
PowerShares DB Commodity Tracking ETF (DBC)
from Nate’s Notes
While there is no doubt that a strong planting season here in the U.S. (and elsewhere) has probably helped keep the prices of some agricultural products down, as mentioned above, I remain perplexed (as do many others, I might add) as to why we are not seeing more of a push towards higher prices across the board in response to the actions that have been taken by central banks around the world over the past several years.
However, in the same way that we apply the mantra to our stock investments, we need to remember here as well that our job is to invest based on what the market is actually doing, not on what we think it should be doing. And, in this case, commodity prices are clearly struggling to catch a bid. That being said, when the turn comes (and it will come... but that doesn’t mean prices can’t be cut in half first!), the rebound will probably be a sharp one.
However, rather than average down month after month in anticipation of that move, I believe we are better off waiting for evidence that it is getting underway before starting to aggressively buy again, even if it means we end up missing the bottom and paying higher prices. DBC is a buy under $27.
Nate Pile, Nate’s Notes, www.NotWallStreet.com, 707-433-7903, August 8, 2014