General
- Individual commodity prices have historically tended to move together over very long bull and bear cycles. These super cycles have often lasted a decade or longer. We believe a new bull super cycle began in 2020.
- China is the largest commodity consumer and was the main driver of two of the recent commodity super cycles (bull: 1999 – 2008, bear: 2008 – 2020).
Oil
- Supply restraint from OPEC+1 as well as U.S. producers have tightened energy markets considerably. The war in Ukraine threatens to tighten markets even further.
- We expect oil prices to be well supported by this supply crunch as well as rebounding demand.
Gold
- After facing numerous headwinds in 2021, gold’s path higher looks clearer in 2022.
- Moderating equity market returns as well as investor concerns about inflation and volatility risks may bring the market’s focus and flows back to the yellow metal.
REITs (Real Estate Investment Trusts)
- REITs come in all shapes and sizes — a REIT that specializes in data centers differs wildly from a REIT that specializes in malls or office buildings — and returns can vary widely as a result.
- Monitoring the fundamentals, valuations, trends, and performance of these different REIT subsectors can provide opportunities for investors in REITs.
1. The Organization of the Petroleum Exporting Countries Plus (OPEC+) is a loosely affiliated entity consisting of the 13 OPEC members and 10 of the world’s major non-OPEC oil-exporting nations.