Infastructure, US and China
After looking at some historical graphs I would say, stay away from this stuff. These commodities are susceptIble to bubbles and for that I would only allocate a very small percentage of your portfolio to this specific one. In 1988 copper was trading at 3400 US$/Tonne and now in 2008 it is trading at 3075 US$/Tonne...hmmm...that is a loss over 20 years! It reached a peak at 8700 US$/Tonne in April 2008 so if you are a market timer and you expect more expansion to come in the coming years, you may be able to realize some gains, but seems a little risky to me and I am risk averse.
Metals are always a good buy, however, it appears that Platinum may be the metal to purchase right now. Its cheaper that gold at the money and the supply is much more limited.
demand will exceed the supply. so there is a good upside for copper for the next year. better hold it now than losing the ride.
Copper is heavily used in manufacturing. In the past it was used for phone lines, not as much now. So copper will track the economy. Copper prices often peak at the highs in the economy. Fall to lows in a recession. I hate metals for buying and holding because they don't make any money. They are just a placeholder for wealth. Trading maybe. Mining companies are okay and their value goes up with the metals but at least they are producing something. Unlike just the commodity. They say The economy is a house with a copper roof. That means often the price of copper puts a limit on how fast an economy can grow or that when copper prices get real high we are near the top of the economy. A chicken or the egg thing. So trade copper as an economy play, up or down. But I don't suggest buying and holding for 10 years. All you will get is slightly better than inflation on average with just the metal, IMO. Good Luck.
