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
- Tight supply stemming from supply restraint from OPEC+1 and the war in Ukraine have tightened energy markets considerably, even as U.S. producers start to produce more.
- We expect oil prices to consolidate as this supply crunch is balanced by an expected slowdown in demand growth.
Gold
- After facing numerous headwinds in 2021, gold’s path higher looks clearer in 2022 as economic growth slows.
- The equity bear market, coupled with investor concerns about inflation and volatility, 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.