It’s probably a good time to invest in commodities now when prices are lower, according to former Goldman Sachs Group Inc. Chief Executive Officer Lloyd Blankfein.
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“From an inflation point of view, as an investor, I think investing in material sectors while they’re under-appreciated is not a bad thing now,” Blankfein said at the CME Group Inc.’s virtual metals briefing. “Everyone has decided that we’ll never have inflationary pressure again, oil prices will never go up again. I don’t think so.”
The Bloomberg Commodity Index is down almost 11% this year, compared with a 2.1% return for the MSCI World Index and 8.8% for iShares TIPS bond ETF.
Blankfein’s comments echoed value investor Kopernik Global Investors LLC, which has has about $3.3 billion in asset under management. Its Kopernik Global All-Cap Fund is up about 23% this year, beating 97% of its peers, according to data compiled by Bloomberg.
Kopernik’s director of research, Alissa Corcoran, said that even though some short-term events such as demand destruction due to Covid-19 haven’t been positive, some commodities would likely see higher prices in the longer-term due to better supply-demand fundamentals.
Blankfein, who joined Goldman as a metals salesman in 1982, wasn’t as optimistic about precious metals, however. He said he’s unclear if it’s a good idea to invest in gold and silver “because it’s been so long since those metals played a role as a store of value.”
Read the full article here by Yvonne Yue Li and Isis Almeida, Advisor Perspectives
