It’s that time of year again: making predictions and placing bets on which sectors will shine in 2008, and what the exchange traded funds (ETFs) that track them will do. Sean Brodrick at Money and Markets weighs in with his prognostications.
Brodrick predicts that while gold, silver and oil will continue to perform, it’s really the bull market in agriculture that is not to be ignored. He cites a study by AIG that shows agriculture investments linked to commodity indexes may climb by $10 billion next year, twice the rise in investment seen this year.
Wheat, cotton and sugar are experiencing increasing levels of demand. Wheat will be especially desirable as droughts around the world destroy crops. Soybeans are in high demand, as U.S. exports of the commodity increase. The prices of corn, cotton and milk items have doubled in the last year.
With ETFs and exchange traded notes (ETNs), you can offset the higher prices at the grocery store:
- PowerShares DB Agriculture (DBA), up 28.2% since January inception
- iPath Dow Jones-AIG Livestock Total Return Sub-Index ETN (COW), down 3.7% since October inception
- ELEMENTS Rogers International Commodity Agriculture ETN (RJA), up 6.7% since October inception
- Market Vectors Global Agribusiness (MOO), up 22.7% since September inception
The opinions and forecasts expressed herein are solely those of Tom Lydon, and may not actually come to pass. Information on this site should not be used or construed as an offer to sell, a solicitation of an offer to buy, or a recommendation for any product.