Rob Wherry for Smart Money explains that a new breed of investor is buying ETFs that follow the price movements of crude oil, or ones that own firms that take it out of the ground and sell it at the corner gas station. United States Oil (USO) is up 53.6% in the past year and deals in oil futures.
One catalyst for price jumps is that we’re in the middle of a commodities bull run. It’s elementary supply and demand.
But bull markets always come to an end, and no one can predict when. Commodities are extremely volatile, prone to uncontrollable forces such as factory accidents, geopolitical upheaval and good old Mother Nature.
You need to keep your eye on these kinds of investments. And you don’t want to get caught up in the buying once it’s already run.