ETFs to Hedge Rising Prices at the Pump
If there is one economic item that unites Americans in frustration, it’s the rising price of gasoline. The fuel for our vehicles has become a necessity for many of us, so price hikes hit hard in the wallet, affecting purchases of other items. So why are gasoline prices on a long-term upward slope? Some Americans point the finger at greedy oil companies, but that is not the answer. Yes, refining margins do play a role in the price of gasoline, but there is one critical factor behind higher gasoline prices: the rising price of crude oil [for more commodity news subscribe to our free newsletter].
Natural Gas, UNG On a 70% Rally
Natural gas has been one of the most talked about commodities this year, as its prices tumbled at the start of 2012. Up until a few months ago, NG had been one of the worst performing commodities over the past few years, as the recession started the fossil fuel on a slippery slope that it would never fully recover from [see also 25 Ways To Invest In Natural Gas].
Panic, Drought, Massive Gains For The Grains
It is no secret that grain prices have been soaring as a number of savvy commodity investors have been cashing in on the latest trend to take the world of hard assets. Many are also aware that a nation-wide drought has been the culprit of said price rises. But while the drought has been widely covered, few realize just how severe it has been. For starters, the trailing 12 months have been the hottest on record for the U.S. since records have been kept (dating back to 1895). Combine that with the lack of rain in the past few months and you have the worst drought seen in nearly 70 years, putting a major pinch on the prices of a number popular commodities [see also Five ETFs To Own During The Next Market Collapse].
Commodity Stock Plays in the 2012 Dogs of the S&P
Many investors are familiar with a group known as the “Dogs of the Dow”, or the 10 highest yielding stocks at the end of the prior year. Many investors use this strategy to help pick securities for the coming year, as they will not only offer strong dividend yields, but it may also be that their prices have been beaten down. Dividend yields and stock prices have an inverse relationship, meaning that a higher yield could reflect a poor performance from a stock in the prior year. Many feel that the dogs are oversold and the fact that they are still offering high dividend yields means the company is still strong [see also 12 High-Yielding Commodities For 2012].
