Monday, August 18, 2008

Commodities and BRIC

How I am going to play this current commodities bull market is by investing in Canadian Financial Institutions, especially banks. This is the same strategy I have used successfully since the 70’s. BRIC by the way means Brazil, Russia, India and China. Our commodities bull market is being pushed especially by India and China.

Canada will do very well because of this as we have much in the way of all sorts of commodities. This commodities bull market should last for some years. Commodities markets have recently been mucking about. The current decline in the price of Oil has been in the news lately. This volatility, of course, is to be expected. This does not mean that there is a problem with our long term commodities bull market.

Both China and India are going to have times of problems, but they have certainly been doing some good capitalistic type moves and have made some good financial decisions lately. We seem to be currently in a time of problems, but this too will pass. It is always hard to say when problems will pass, but they will, they always do. Every market has it own rhythms. There are times when investors in any market act like a mob and times when they act as individuals, so there is a lot of psychology involved. This is why technical analysis, to a great degree, works.

As I have said earlier, I like to invest in banks and other financial stocks to take advantage of other economic activity occurring in Canada. Financial stocks are far less volatile than, say commodities, and this is why I like them. Our large Canadian Banks have been great long term investments, producing not only good returns, compared to the TSX, but also great and increasing dividend income.

This blog is meant for educational purposes only, and is not to provide investment advice. Before making any investment decision, you should always do your own research or consult an investment professional. See my website at for a list of the stocks for which I have put up spreadsheets on web site.

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