You can expect that when a year ends the people that tally numbers will begin tallying. They produce interesting results oftentimes. While pretty much no one invests January 1st to December 31st, it is informative and perhaps captivating to peruse the annual results. This short article will disclose some of the best investments of 2016 across all asset classes, including commodities.
Before we get started, however, I want to introduce a couple of thoughts and truths. Commodity investing in the US is actually somewhat rare. What is not rare, however, is US commodity consumption. Chances are pretty good that when you read the best performing commodity investments of 2016 you will recognize them as products that cost you more in 2016 rather than investments that generated wealth or income. With that in mind, let’s get started.
The Best Investments Of 2016 : #5 Sugar.
Chances are pretty thin that you are invested in sugar. Sugar prices climbed a hefty 21.62% in the last twelve months. Being that sugar is a staple of food production, you probably noticed the rise in sugar prices in your grocery bill and food budget rather than your retirement portfolio.
I will take this chance to point out that this equation gets a bit more complicated. You see, not only are sugar prices rising, but the value of the dollar you are purchasing the sugar with is falling. This creates a fiscal catch 22 of sorts when the currency you save in constantly loses value against the products it is used to purchase.
The Best Investments Of 2016 : #4 Brent Crude Oil.
Brent Crude is a major classification of sweet light crude oil. “Sweet” oils have a low sulfur content. A little sulfur produces a lot of stink, hence the name “sweet”. The oil is also a light or less dense oil suitable for being distilled into petrol or gasoline. Brent oil is often refined in NorthWest Europe.
In 2016 Brent oil prices climbed 27.99%. Again, however, most Americans realized this substantial rise in prices as bad news rather than good.
The Best Investments Of 2016 : #3 Orange Juice.
Orange Juice (and oranges) get traded right alongside pork bellies (up .71% last year), soybeans (up 15.48% in 2016) and cocoa (down a whopping 31.46% in 2016). Orange juice prices jumped 31.75% in 2016.
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By the way, all seven major currencies fell against gold prices this year, and none made nearly the gains that oranges did. In essence, oranges handily outperformed the US dollar last year. In addition, in 2016 you needed more dollars to purchase that Denny’s glass of orange juice than the years prior because it cost them substantially more to serve it. You may consider planting an orange tree or two if it is an option for you.
The Best Investments Of 2016 : #2 Heating Oil.
The words “heating oil” speak for themselves. Heating oil has to be processed however in order to become heating oil. Heating oil is a by-product of refining crude oil. Other by-products include kerosene, asphalt, gasoline, diesel fuel, and liquefied petroleum gas.
Perhaps you purchase gasoline and even diesel from time to time, and you know it can be costly. If you live in a home that burns heating oil, however, you know that filling up that tank is much more costly. Winter storms and blizzards can put a serious strain on the household budget when heating oil prices rise. In 2016 heating oil prices rose a staggering 34.63%. Some Americans made money on this rise in prices, but more paid in.
The Best Investments Of 2016 : #1 Ethanol.
Ethanol is a bit confusing. Some may immediately think drag racing. Others may equate ethanol with alcohol, which is fair. Ethanol has many uses these days and apparently, they are all becoming more expensive. Ethanol prices were up 46.8%.
To be fair, I do not know the reason for this huge price spike. Ethanol is produced by fermenting yeasts and sugars. Ethanol is also known as drinking alcohol and can be produced from corn. Likewise, ethanol is a renewable bio-fuel.
Ethanol is now blended into more than 97% of the gasoline sold in the US. Commonly, a 90% gasoline 10% ethanol blend is dispensed at gas station pumps. If you look at the pump you will probably see a sticker stating this fact. The sticker will also probably say something about a law requiring you to use the ethanol blend.
I could be wrong, but I would be more inclined to believe that the rise in Ethanol prices has more to do with mandates and laws than a dramatic increase in US beer and wine consumption. Again, ethanol probably ended up costing you more in your budget than it returned in your investment portfolio.
The Best Investments Of 2016 : Gold And Silver.
Gold finished 2016 up roughly 7%. This was good enough to land gold in 18th place. Silver finished the year up 13.14% securing 12th place. Here it is only fair to point out that gold, and silver to a lesser extent, also function as currencies in addition to functioning as commodities.
Call an ITM Trading representative and discuss using gold and silver to diversify your portfolio and safeguard your purchasing power for things you may need later on in life, like a little ethanol in your orange juice.