It is likely to increase the attractiveness of the sector with the progress in the new year, and to submit multiple entries for attractive earnings in the medium term, and exploiting those opportunities to focus on portfolio structure requires next to the selection of appropriate investment mechanism, and careful in the selection of assets.
If we say that 2015 was a difficult year for commodities, it would be a understatement of what actually happened, although oil control the headlines due to lower its price to the lowest level in seven years, the damage was extensive, and the long copper, corn, and platinum, and sugar, who fell also strongly their prices.
Even gold, which fell to the lowest level in several years, shedding 10% of its value, failed to attract buyers usual in waves of violent unrest in the stock markets, shocks geopolitical, and the movements of bonds unforeseen market, and the link is not expected in the movements of some asset classes, and the divergence of views on Central bank policies.
Investment approach and will look through index funds, and other products that follow the indicators, particularly attractive after a year of sharp decline in commodity prices, but I most likely that it will be very volatile and confusing for many investors.
The investment opportunities stunning would be the individual companies and goods will diminish have the technical factors that have caused the depletion when the forces are changing in the market, and thus will begin the recovery, which may take a multi-year phase, revenue top lie particularly in the companies forced to reduce its debts, using investment mechanisms placed carefully.
To illustrate, look at what is happening in the mining sector, many of the assets there, ranging from gold mines to copper in urgent need and severe liquidity at the same time, they have not only the composition of huge debts during the good times, but also have been slow to reduce their spending rates , but that other, despite these circumstances, raise its debt in the hope that the initial decline in prices temporarily and fast reversal.
See also to the energy sector, Besides suffering from a new supply and abundant from non-traditional sources, and reduction in demand, experienced another blow through a resolution «OPEC» understandable reasons for more than a year to abandon the product controller in prices role in times of downturn.
Now, in light of price stability on market forces slow evolution stopped, severe noise, will remain the big title of the game twists in the Gaza taken significant change in the work by surprise environment, and will pay the resulting mixture of the collapse in prices, large lot of non-traditional companies starved of cash, Daily fluctuations In the market.
The best way for investors to exploit these potential opportunities is the use of arms is clearly designed to customize «patient capital» is employed with the time in this desperate companies, with a specific exit strategy in the medium term.
This could be financed through the arms of long-term capital for at least 5 to 7 years, and that comes mostly from the providers have the ability to increase funding with the time when you see other opportunities.
These should focus investment arms to a large extent on the opportunities in one asset class, either mining or parts of non-conventional energy, with the aim assembled in a diversified portfolio of property, and this would mitigate the risk of loss in one state.
This focus on liquidity-starved assets of the commodity sector as a whole will help to stabilize gradually, and will provide entry points for investors who are either unable or unwilling to use the least liquidity arms.
The more time passes in 2016, the commodity sector will provide an amazing investment opportunities, but instead of a rush, I would advise investors to follow medium-term approach, which will attract more attention to the arms of the investment, at which time it will reveal individual opportunities.