Good morning! Let me start off by answering some viewer comments;
Question #1: What ETFs do you suggest for participating in the return of the commodity bull? The ones I normally employ are XLE, OIH, XLB, etc. Would you suggest any others?
As I was watching "Mad Money" on Friday, a caller asked Jim about Schlumberger (SLB). Cramer said don't buy it, he thought it was going lower, and he thought energy prices would fall for the next six weeks.
I thought that was an interesting comment since in six weeks we will be on the door step of the mid-term elections. I have mentioned many times about the "magic" that will occur in energy prices a few months before the election. I don't know why Cramer just didn't come out and say it though. Maybe he was scared.
This being said, I agree that energy and commodity prices will continue to be weak right up to the election. However, our ETF's back-test just completed on September 1st does not include a single energy ETF in the top 25.
That being said, I would look at dollar cost averaging in to the PowerShares DB Commodity Index Tracking Fund (DBC).
The fund is not as diversified as one would think a commodity fund would be, and it currently holds only six commodities in the fund.
They are; Light Sweet Crude 35%, Heating Oil 20%, Aluminum 12.50%, Corn 11.25%, Wheat 11.25%, and Gold 10%.
I do not look at this as being a negative, but to capture a broader spectrum of commodities, we would have to add some natural resource stocks to our portfolios as well.
Stocks that come to mind are; RTP, PD, TCK, ACH, AL, AA, NUE, and BHP.
On the precious metals front, our ETF system has identified;
(GLD) streetTRACKS Gold Trust (#2 on our list)
(IAU) iShares COMEX Gold Trust (#3 on our list)
And the system has also the following country specific ETF's;
(EWL) iShares MSCI Switzerland Index Fund (#4)
(EWP) iShares MSCI Spain Index Fund (#6)
(EWC) iShares MSCI Canada Index Fund (#9)
Viewers are also asking about our Dynamic Growth Newsletter
Dear John,
In regards to your newsletter, when do you think it will be coming out and what price do you think you'll associate with it?
Thanks again for all your help.
We are working to get the service started by mid to late October.
There is an incredible amount of small stuff that needs to be completed when launching a service as important as Dynamic Growth. In addition, it is very expensive to get all of the pieces in place.
Picking the Funds and ETF's is the easy part. If the behind the scene's people do not have the pieces put together by mid October, I will start the service at no charge until the newsletter is ready to go public for subscribers. Once this happens, only subscribers will have access to the newsletter.
