The world is rather tumultuary: The Tunisian government was overthrown just a few weeks ago. Now Egypt is in deep turmoil and I bet the Egyptian President Mubarak may not survive the upheaval after 30 years in power. What's the reason? They have one main cause: a huge inflation which has caused substantial increases of the food price. Don't ignore this important phenomenon in the world: the world is going to face serious shortage of foods in the next decades. What is happening now is just a beginning and it will become more and more serious and more countries will be brought into this kind of pandemonium, soon or later. Let's face it: the world population is increasing much faster than what the agriculture production can supply and the ever deepening inflation will only make the situation even worse. That's why the greatest commodity investor, James Rogers, said if you want to make money, you have to become a farmer.
I think this is a multi-decade trend to invest in the agriculture sector. The easiest way to invest in Ag is to buy the EFT fund, called PowerShares DB Agriculture Fund (symbol DBA). DBA has appreciated quite a lot in the past year and I'm not sure at this price of around $34, it is a good buy in the short term. It may tumble as well if the overall market is correcting, which I think is looming. But if it dose come down, I think it would be a good idea to put some money in it to get along with the long term trend.
No comments:
Post a Comment