penny stocks to buy in commodities
TRANSCRIPT
Penny Stock Research
Penny Stocks To Buy
In Commodities
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Hi, My name is Aaron and I‘m with Penny
Stock Research, today were reviewing our
recently published article…
Penny Stocks To Buy In Commodities
Investors are finally starting to realize
just how bad commodities have been for
the past year or so. Certainly anyone
investing in commodities has been aware
of this…
but now mainstream investors are
getting clued in to just how bad it’s been.
And it’s not just oil, just about every
commodity has taken a beating recently.
For instance, iPath Bloomberg
Commodity ETF (DJP) is down 18% year-
to-date and 29% from this time a year
ago. DJP is an equally weighted
commodity index ETF, so it’s a pretty
good indicator of what’s been going on
overall. Here’s the chart:
It’s obvious from the chart just how bad
it’s been over the last year. But, just to
give you a few more data points, check
these out: Crude oil is down 54% over
the last year. Heating oil is down 45%.
Coffee is down 41%.
Natural gas is down 36%. Sugar is down
29%. Copper is down 26%. Even gold,
the popular safe-haven investment, is
down 7% over the past year. So you can
see, commodities have basically taken a
bath across the board.
Does this mean you should avoid
commodity penny stocks as well?
Not necessarily.
So what are the right commodity penny
stocks to buy?
Commodity companies are well
represented in the ranks of penny stocks,
so there are plenty to choose from.
However, I think the key is to avoid highly
speculative companies, particular those
related to gold and oil.
Here’s the deal… You see, one of the
main reasons for the fall in commodities
is oversupply. It’s particularly true of oil
due to all the fracking-generated supply.
The world’s oil storage tanks are
basically overflowing.
As such, it’s going to be very difficult to
justify spending money on a speculative
oil investment when so few operations
are profitable as it is. This glut could
take years to sort out.
Regarding gold, with global central banks
no longer stocking up on the precious
metal, demand is nowhere what it used to
be. Here again is a situation that likely
won’t change anytime in the near future.
So then, which penny stocks to buy?
Commodities can’t stay in the dumps
forever, despite the oversupply situation.
But, as I explained above, some
commodities are likely going to have a
longer road to climb. Those are the ones
to avoid.
In the meantime, there’s always going to
be demand for things like corn and
cocoa. Plus, these commodities can
actually see immediate supply hits due to
inclement weather.
As such, I’d be looking at commodity
companies related to agricultural and
soft products as much as possible.
There are typically a fair amount of
agricultural-related penny stocks out
there.
There may be equipment or chemicals
businesses in the ag industry, to name a
few possibilities. These are the better
long-term commodity bets.
If you’re interested in mining companies,
I’d stick to base metals companies rather
than precious metal ones. There’s a built-
in demand for base metals, such as
copper, which provide enough intrinsic
value to metals to make downturns less
likely to be as severe. The key here is to
avoid the most speculative companies.
Try to stick with established companies
which are only down to
penny stock levels due to the commodity
selloff – and not due to the company
itself. Keep in mind, no asset class is
going to be down forever.
Eventually, commodities will rebound.
And, you’ll be in good shape if you own
the best in class commodity penny
stocks.
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