Invest 101: "stagflation" variant of Wall Street this week is an area of substantial market slowdown in GDP growth and persistently high inflation, especially food and energy. How is an investment in this climate? Not surprisingly, by means of tradable goods.
In the current market, but some parts of opinions on the price of registration of oil futures with a growing role in the search for sources of new oil. Similarly, all fully invested in agricultural stockswell positioned to benefit from rising food prices.
Monsanto (MON), for example, in the business world agricultural seed. This company is a ring leader when it comes to finding innovative ways for farmers to increase their productivity. The demand for cereals is an all time high, and MA will be before the game, as well as plans and taxes on the future needs of agricultural policy.
Similarly, Syngenta (SYT) produce seeds and chemicals used by farmers to expand the collection of grain. Both SYT and show MAExtraordinary sales and earnings growth due to higher prices and commodities are great stocks to buy, if you are a professional commodities.
But the demand for food is not the only factor that drives these stocks at a higher price. The race is on: companies and nations harbor them compete for the largest share of the pie of power. Stocks of alternative energy are hot investments, as investors see more "green." But what really works, the prices of agricultural stocks are biofuels beer, whichputting pressure on cereals.
It is estimated that one third of the corn crop in the United States is required to produce ethanol as a means to offset dependence on oil. Ethanol is in great demand throughout the world, which means that wheat farmers uitgeknip their work for them. According to a report published by the U.S. Department of Agriculture, farmers use about 137 kilograms of nitrogen fertilizer. Since the wheat producers seek to expand their territory, require large amounts of fertilizer –must buy from somewhere!
Companies like Mosaic (MOS), potassium (POT) and Agrium (AGU), an unprecedented growth and margin expansion due to demand for their products fertilizers. These three actions are a good way to take advantage of the prices of food and commodities trading in general.
It 'important to remember that the commodities bubble will not appear in the near future. The fact is that we saw a big peak in global demand for both food andenergy. Even if people drive less and buy more fuel-efficient cars, supplies of crude oil are declining. There is no quick solution to high oil prices. No matter how we changed our behavior as of late changes are not drastic enough to make a significant difference.
Another lesson to invest 101: As long as demand continues to grow and offer, at best, the features in the plan, continues with this type of market behavior. The way to take advantage of this environment stagflationarythrough commodities trading. There are no if and no reservations concerning it.