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What’s going on with resources?
Where is the commodities cycle going? How does this cycle differ from others? Experts see both new factors and the usual drivers, reports Lisa Steyn
The well-worn adage "all good things must come to an end" is especially true for commodities price cycles, and for a while now investors have been on a thrill-ride onward and upwards as prices kept rising. But two key questions emerge. For those on the outskirts, the question is whether it’s too late to get in on the action. For people already invested in resources, the question is how to know when the party is well and truly over. Your money would almost have doubled if you had invested in the JSE’s resources index in the six months from early December 2015 to early June in 2016, when the oil price languished below $50 a barrel and other commodities experienced marked lows. That’s significantly more than the 17% return you would have realised if you had chosen instead to put the cash in the JSE all share at that time. The general mining index has had a similarly spectacular performance, and for the first time in a decade has outperformed the Alsi. Domestically, bulk commodity price...
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