Why Investing in Commodities: Embracing Inflation, Investing Over Time, and Delving into Fundamental Research

by | Feb 19, 2024 | Invest During Inflation

Why Investing in Commodities: Embracing Inflation, Investing Over Time, and Delving into Fundamental Research




Do we lean into inflation or panic? Commodity investment expert Simon Popple advises invest in areas that are going to go up in price. Think fuel, think energy and think about the opportunities that some well-run mining companies will present to those not risk averse and those with the time to do their research.

Popple is founder of Brookville Capital, a service dedicated to educating about commodities, portfolio diversification and stock recommendations including Chalice Mining which has increased ’65 times’ since Popple’s endorsement.

In this webinar he shares his BRIDGE stock analysis technique, and belief that investors should ‘spend time in the market instead of timing the market.’ Simon also gifts viewers and listeners of this Master Investor interview with an inflation busting exclusive discount code to his weekly Brookville Capital Intelligence Report.

Download Simon’s presentation slides:

Key moments:

00:00 Intro

00:10 About Simon Popple
Sarah Lowther speaks to Simon Popple, a commodity investment expert and director of Brookville Capital. Simon provides weekly research on commodity companies.

00:28 The impact of inflation
While inflation cannot be solved, investors can lean into it and benefit to some extent, by looking to invest in areas that are going up in price, such as commodities or food.

03:17 The recommended commodities portfolio
While the composition of a commodities portfolio depends on the individual risk appetite, it is recommended that investors include a mix of both explorers and developers/producers. Producers are particularly suited for those with a lower appetite for risk, while explorers generally pose a higher risk for investors.

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10:14 Simon Popple’s investment strategy
Simon Popple follows a “3 Rs” investment strategy that incorporates risk (companies matching the appetite for risk), resources (time required to carry out research etc.), and research (several factors to look for in mining companies).

17:35 About Chalice
Chalice is an Australian junior mining company with land located next to Fosterville, the world’s highest-grade, most profitable gold mine. The company made a massive find of precious metals in Julimar, east of Perth, which took its share price to an unprecedented level, increasing 65 times since Popple’s endorsement.

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Commodities Investing: Lean into Inflation, Spend Time in the Market, and Research the Fundamentals

In today’s uncertain economic landscape, many investors are turning to commodities as a way to hedge against inflation and diversify their portfolios. As the prices of everyday goods and services continue to rise, commodities have become an increasingly attractive option for those looking to protect their wealth and potentially earn a solid return on investment.

One of the key reasons why commodities can be a good investment during inflation is that their prices tend to rise in tandem with inflationary pressures. This is because commodities such as gold, silver, oil, and agricultural products are tangible assets that have intrinsic value. As the value of fiat currency decreases due to inflation, the value of commodities often increases, making them a good store of value during times of inflation.

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When investing in commodities, it’s important to understand that these assets are subject to the ebbs and flows of the market. This means that investors need to be patient and willing to ride out short-term fluctuations in prices. Unlike stocks and bonds, commodities can be more volatile and have a different set of factors that influence their prices. As such, it’s important for investors to spend time in the market, understanding the various dynamics at play and being prepared to hold onto their investments for the long term.

One of the keys to successful commodities investing is conducting thorough research into the fundamentals of the market. This includes understanding the supply and demand dynamics of the specific commodity, as well as geopolitical and macroeconomic factors that could impact its price. For example, investors in oil need to be aware of factors such as OPEC production levels, global demand, and geopolitical tensions that could affect the supply and price of oil.

In addition, investors need to be mindful of the specific risks associated with each commodity. For example, agricultural commodities are subject to weather and supply chain disruptions, while precious metals can be influenced by currency fluctuations and central bank policies. By conducting comprehensive research, investors can gain a deeper understanding of the various factors that drive commodity prices, and make more informed investment decisions.

Furthermore, investors can gain exposure to commodities through various investment vehicles, such as exchange-traded funds (ETFs), futures contracts, and commodity-focused mutual funds. These instruments provide access to a diversified basket of commodities, which can help reduce risk and provide exposure to multiple sectors within the commodity market.

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In conclusion, commodities investing can be a valuable addition to a well-rounded investment portfolio, especially during periods of inflation. However, it requires a thoughtful and patient approach, as well as a deep understanding of the market fundamentals. By leaning into inflation, spending time in the market, and conducting thorough research, investors can position themselves to potentially benefit from the unique characteristics of commodities as an investment asset.

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