Apr 12, 2022
Clifford Rosler Management has today reported that Commodities are set to surge by up to 40% — placing them well into record territory — should investors increase their allocation to raw materials during a period of rising inflation.
"While commodity allocations look to be above historical averages, they are not too overweight," said Graham Fuller, Clifford Rosler Management's Director of Corporate Asset Management. "That indicates there is room for investors to gain in raw materials," he added.
Last month, when markets were roiled by Russia's invasion of Ukraine, commodity prices soared to new highs, driving up costs of everything from oil to wheat. This has spurred already-high global inflation and a tougher response from the Federal Reserve, prompting investors to consider rebalancing the weighting of assets between stocks, bonds, and raw materials in their portfolios.
"Following the Russian invasion of Ukraine, we updated our commodity price forecasts," said Harvey Foster, Director of Institutional Management at Clifford Rosler Management. "At this juncture, where the need for inflation hedges is more apparent, it is plausible to see longer-term commodity allocations ultimately rising above 1% of total financial assets globally, exceeding previous highs. And if other conditions remain the same, it indicates another 30% to 40% upside shift for commodities moving forward," he added.
Commodity prices have rallied across the board this year, with gains in energy, crops, and metals. Oil prices have risen by 33% year-to-date, while natural gas, wheat, and copper prices have jumped 65%, 33%, and 7%, respectively.
Company Information
Clifford Rosler Management is an international financial services company founded in 2000. Headquartered in Seoul with an additional Research & Trading office located in Toronto, the company strives towards providing an unparalleled level of services to its clients. For more information, please visit www.crmholdings.com/.
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Eric Cardinal, Chief of Economics & Analytics
[email protected], +1 (0) 647 846 5840
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