Preparing For Economic Headwinds: Bill Gross’ Commodity Picks

In his most recent investment outlook, aptly titled “Strawberry Fields – Forever?”, legendary bond king Bill Gross warned that Americans should be prepared to face some “structural economic headwinds” in the next few years that will likely frustrate almost all of us. Besides the damages still felt by the financial crisis, diminished productivity gains and the looming fiscal cliff, Gross points out that are other glaring red flags that investors should keep their eyes on, as these critical factors will likely hamper economic growth in not only the United States, but also in other developed nations across the globe [for more commodity news and analysis subscribe to our free newsletter].

In order for real economic growth to exceed the lackluster figures we see today, Gross identifies four structural economic headwinds that we must overcome: debt, globalization, technology and demographics. The debt issue is perhaps the most obvious one, as the reduction of our nations’ and the eurozone’s debt piles will be felt by all for years to come. Globalization and technology being identified as “issues” may be surprising to some, as these two phenomenons usually have more positive connotations. Though globalization has certainly been a “historical growth stimulant,” the vast and complex web of interconnected relationships have also hindered us, as economic turmoil in one nation almost always spills over into the next [see also A Deeper Look At America's Commodity Industry].

Technology too has been a key factor in propelling our global economy, but with that comes the sacrifice of millions of workers being replaced by machinery and robotics. This “technological unemployment,” more commonly referred to as structural unemployment, may be what prevents us from reaching levels close to our full potential, or even some sort of economic relief. In regards to demographics, Gross notes that the aging population found in most developed economies will likely lower productivity and employment growth rates, as well as personal consumption.

Gross’ Picks For Weathering The Storm

In response to what exactly investors should be doing to protect their portfolios for the “structural economic headwinds,” Gross puts an emphasis on pinning down those investments that can producereal returns, namely commodities such as oil and gold [see also Gold And The Fiscal Cliff].

He points out that the United States is on track to become energy independent in the next ten years, and that reversing or even containing the 40-year upward trend in energy prices may be key to boosting productivity and economic growth. For those who are in the bond king’s camp, which likely is almost everyone, keeping a close eye on oil and gold may certainly be worth while.

This article was originally written by Daniela Pylypczak, and posted on CommodityHQ.

Biotech Insider Alert - $6 Stock To Hit $40

$200 Million Dollar Healthcare Hedge Fund's #1 Best Idea Right Now

The best healthcare hedge fund out there right now is one of the largest shareholders in this biotech stock. The fund returned more than 20% in each of the last 2 years with a virtually fully hedged portfolio, and it's sending out a BUY signal on this biotech stock. Get your FREE REPORT today (retail value of $300)

This is a FREE report from Insider Monkey. Credit Card is NOT required.
Comments
Insider Monkey Small Cap Strategy
Insider Monkey Small Cap Strategy

Insider Monkey beat the market by 52 percentage points in 24 months. Our beta is only 1.2 (don't click this link if beating the market isn't important to you).

Lists

The Greatest Directors in the World

Largest Animals in the World

World’s Most Expensive Desserts

Best Selling Comic Books of All Time

A-list Actors who Sabotaged Their Career

Rappers With a College Degree

The Best Jazz Albums of all Time

The Most Influential Jazz Musicians

The World’s Most Famous Photographers

The Best Oscar-Winning Songs

Most Influential Choreographers Ever

Most Expensive Department Stores in the World

The Most Expensive Stolen Paintings in the World

The World’s Most Expensive Teas

Top Oscar Record Holders

The Most Expensive Flowers in the World

Countries With a Booming Film Industry

Most Expensive Cupcakes in the World

Uncommon European Escapes

The Most Stolen Artists in History

Best Travel Destinations in Australia

World’s Most Expensive Musical Instruments

World’s Most Famous Animals

Most Expensive Cakes in the World

Most Expensive Kosher Champagne in the World

Most Expensive Kosher Wine in the World

The Most Surprisingly Dark Fairy Tales

Most Popular Travel Destinations in Asia

The 10 Most Expensive Dresses Ever Worn to the Oscars

World’s Most Visited Art Museums

Best Countries for Photographers to Work in

Best Paid Jobs in the Film Industry

The Most Renowned Recovered Paintings Ever

Child Stars That Turned out Just Fine

Books That Were Banned in the Past Century

World’s Richest Dancers

Best Remedies against Bad Breath

Foods That Improve Your Skin Texture

Best-Selling Children’s Books of all Time

Foods That Boost Your Libido

Best-Selling Books of all Time

The Most Expensive Academy Awards Jewelry in History

Most Expensive Japanese Restaurant In New York City

The Best B-Boy Movies

Most Awesome Hip Hop Documentaries

Foods That Stain Your Teeth

Richest Doctors in the World

The Best Movie Sountracks Ever

The Highest Grossing Musicals on Broadway

The Most Successful Reality TV Stars

Subscribe

Enter your email:

Delivered by FeedBurner

X

Thanks! An email with instructions is sent to !

Your email already exists in our database. Click here to go to your subscriptions

Insider Monkey returned 129% in 2.5 years!! Wondering How?

Download a complete edition of our newsletter for free!