The Price of Oil (Wheat, Corn, Gas & Everything Else)
Sometime in late 2011 the world will reach 7 billion inhabitants. How should this effect the way that you invest?
There are two main factors.
1) More people means we will need more of everything. More oil, more gas, more wheat, more milk. The price of commodities have nowhere to go but up. Approximatley 1 Billion people are not properly nourished, and that number will only go up as the population grows. One of the most important allocations in your portfolio needs to be a diviersifed commodity fund, and that allocation should be anywhere from 7% to 15%.
2)The entire world (except for a handful of revolutionaires) aspire for the American lifestyle. They want to own a home, have their own vehicle, eat well, have an education, and have discretionary income. This means that 3rd world countries are aspiring to the consumer lifestyle, and the demand for consumer goods that we take for granted will continue to grow. Think of cell phones, cars, air conditioning, and coffee.
Macro-economic tendencies provide a very strong clue as to what companies and sectors will continue to flourish.