Reconsider commodity exposure in your portfolio

Summary:

1. Recent podcasts, strategy reports, videos

2. Global inflation is rising thanks to food prices, shipping, wages and supply shortages

3. The race to a net zero carbon future is inflationary in the short term

4. Commodities have historically proved a good hedge to unexpected inflation

5. Funds and ETFs to play this commodity theme

Recent podcasts you may care to listen to

My September Investment Strategy video and research report you may wish to watch/peruse:

My recent 3-minute pitch on Geiger Counter (LON:GCL) Geiger Counter, together with 9 other excellent stock pitches, is available in this Stockslam video:

A rising inflation tide lifts commodities

feg65-OEohnchqlFtpmn-TN2KEUmZFrFLHFLAJKpW6fF3TvFEWUD2Zd7pyU_6L5ktMRbxARVz_k04-lKADVimUOtgKykhN7LfTn17ixmLsX_Qfe_YFd5WGZfAD5ZB1Kf6mITbLPb=s0 There can be no doubt about it - inflation is back with a bang! The smell of rising prices is in the air, from second-hand cars to bicycles to vegetable oil. We could go on for hours debating the many sources for this latest surge in prices, including:

  • The recent Suez canal blockage and rising shipping costs;
  • Widespread supply shortages of critical components such as semiconductor chips, curtailing production of all manner of products such as cars, computer graphics cards, Tvs and smartphones;
  • Higher wages amid a tightening employment market, particularly for certain segments such as truck drivers;
  • Rising energy prices amid low inventories;
  • Strong growth in end-demand post reopening of economies, particularly in the service sector;

These are just a selection of the drivers behind rising prices in all manner of goods and services, manifesting itself in rising consumer price inflation rates globally.

Consumer Price Inflation Surges in US, UK, Europe

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Source: St Louis Fed

Now we have been here before: post the Great Financial Crisis in late 2011, we equally saw a sharp rebound from depressed inflation levels to close to 4% in the US and UK, and close to 3% in the Euro area as a result of economic recovery. We could say the same about today, post the pandemic-driven lockdowns around the world that brought economic activity to a shuddering halt back in early 2020.

But, there are also some important differences to take note of, which suggest that this shift in inflation rates will be…

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