by Peter Krauth, Contributing Editor
Editor’s Note: With the incredible amount of interest in buying gold and investing in commodities, we’ve turned to Money Morning commodities expert Peter Krauth to give us an idea on where we are in regards to their historic cycles and how investors can take advantage of where we are right now…
There’s never been a better time to begin investing in commodities.
That’s a very simple statement, but it’s backed by three powerful points:
- Commodities tend to do well when more popular investments (with retail investors) are doing poorly, and when economic conditions are less than ideal.
- When the typical economic underpinnings are at play, a “Secular Bull Market” for commodities tends to last for about 17 years. And right now, the underpinnings are far from typical - and may even be exemplary, meaning this bull-market run could last a lot longer than the norm.
- And last, but not least, we’re only about nine years into this commodities bull market, meaning that there’s probably a lot more room to run - maybe eight years, and very like even more.
Amazingly, this powerful notion of the “Secular Market Cycle” - despite its tremendous profit potential - is largely unknown to the investment masses, and is rarely discussed by the mainstream business news media. Indeed, it’s so taken for granted that it’s almost a market secret…
If you’re a long-term investor, however, you’ll ultimately realize it’s one of the most lucrative strategies you have in your investing arsenal. And most amazing of all is that it’s easy to understand, easy to deploy and easy to profit from.
Let me explain.
Investing in Commodities & The Secret of the Secular Market Cycle
Why is this commodity investing strategy so special? Well, with a finite time to invest for your retirement, it’s crucial to recognize and understand what we like to refer to as the “Secular Market Cycle,” or “Secular Cycle,” for short.
As the chart shows, a Secular Cycle, from peak to trough, typically lasts about 17 to 20 years on average (the period depicted by the chart ends in 2004, but still perfectly illustrates our concept).
And there are essentially two types of cycles:
- The “Secular Bull Cycle,” during which regular stocks increase in value, and have their Price/Earnings (P/E) ratios (earnings multiples) expand.