Riding the Wave of the Next Commodity Supercycle
Within the past several years, commodity prices reached a 50-year low relative to equity valuations (https://ibn.fm/QrRMU). Historically, such lows in the commodity-to-equity ratio have marked the onset of new commodity supercycles—prolonged periods of sustained growth in raw material prices—and we’ve clearly seen the markets shifting with gold hitting all-time highs throughout much of this year. As global economic conditions evolve, commodities have been re-emerging as an important consideration when reconstructing investment portfolios. The last major commodity supercycle (1996–2011) was fueled by the industrialization of emerging economies like China, India and Brazil. Today, a combination of inflationary pressures, supply chain disruptions,…
