The commodities sector is one which has continued to lag behind higher-growth sectors such as technology in recent years, a fact which has left many conservative investors wishing they had traded in their investment strategy for a more bullish mantra in an effort to maximize returns over the course of this recent bull market.
While the vast majority of commodities have languished, a few have stood out as winners in this current market. Rare earth minerals such as cobalt, lithium, and others related to the production of electronics have continued to climb in value as investors price in increasing long-term growth rates within this sector.
Recent reports that some of the world’s biggest technology companies, including Apple Inc. (NASDAQ:APPL) have begun to negotiate bulk pricing for minerals such as cobalt has continued to spur interest in the rare earth mining sector, a niche which in my opinion has been unfairly ignored by too many investors, given its unique growth profile within the commodities space.
In what is likely to turn into a race for these rare raw materials in the years to come, investing in a basket of firms mining minerals such as cobalt or lithium may be one of the most prudent investing strategies for the commodities portion of your portfolio. Even in the deepest of recessions, the reality remains that electronics will continue to be purchased at breakneck speed, a fact which has many, including myself, bullish on rare earth miners at this point in time.
Invest wisely, my friends.
