Smart Investors Know The Importance Of Inflation Protection

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One of the most significant economic sectors on the planet is agriculture, which has been greatly affected by climate change and recent geopolitical events.

When the cost of living goes up substantially with inflation, the price of real assets like food, fertilizer, seeds, energy, and land also skyrocket.

Harsh weather, social unrest, and recent geopolitical events have contributed to supply restrictions and price volatility, directly affecting grain production and global agricultural trading.

That's why investing in commodities is one of the most innovative ways to protect your wealth during inflation and even make money - no matter what the stock market does.

So, if you're looking for an investment that will help you keep up with inflation and diversify your returns, then real assets and agriculture commodities could be suitable for you.


S&P 500 Compared to Invesco DB Agriculture Last Two Years

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For example, take the Invesco DB Agriculture Fund, which provides exposure to a diversified basket of soft commodities.

It is intended for investors looking for a low-cost way to participate in commodities futures with a total expense ratio of 0.93% and offers a diversified basket of agricultural commodities.

Because the fund is well diversified across agricultural commodities, it is much less volatile than trading an underlying commodity directly, and by actively trading this ETF, you can also minimize drawdowns.

The DBA chart shows outperformance to the SPY over the last 2 years. The Daily chart shows that DBA has held over the 50-DMA and once it clears the 200-DMA could see much higher levels.

Unlike stocks, bonds, and other traditional investments, commodities offer a direct way to profit from inflation. And an actively managed 'real assets' allocation to your portfolio is a great way to do it.

ETF Summary

S&P 500 (SPYNow an unconfirmed phase change to bearish-400 pivotal

Russell 2000 (IWMHeld the 50-DMA and if continues to do so could see some buying

Dow (DIANow an unconfirmed phase change to bearish-321 pivotal

Nasdaq (QQQNow an unconfirmed phase change to bearish-305 pivotal

KRE (Regional Banks) 62.00 the 50-DMA

SMH (Semiconductors) Confirmed bear phase however 215 pivotal support

IYT (Transportation) 227 the 50 DMA.

IBB (Biotechnology) Confirmed bear phase. 124 resistance 117 next support

XRT (Retail) 64.00 area the major 50-DMA support


More By This Author:

Powell: Inflation: Public Enemy No. 1 To The Stock Market
Granny Retail - Can The Consumer Hang In There?
Grain Prices Suggest Inflation Far From Peaking

Disclaimer: The information provided by us is for educational and informational purposes. This information is based on our trading experience and beliefs. The information on this website is not ...

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