Inflation Kicking In

A report on the Edge caught my attention today. Inflation seems to be starting to hit after all the money printing. 

Singapore CPI rise beats expectations, economists flag: Update
Monday, 24 January 2011

© 2011 - The Edge Singapore

Despite the measures expected to curb inflation here in sunny, maybe too sunny, Singapore, it's apt to be mindful that some countries don't seem to be curbing inflation anytime soon, primarily U.S.. As precious metals, oil, and other commodities are traded in U.S. dollars, with rising prices due to rising inflation, perhaps investing in these may turn this "trend" into a friend.

The precious metals for example, have had a rather sharp fall last week and seem to be correcting still. However, to anyone thinking it's the end of the metals bull market, that's not true. Not yet at least. The major trend is still up. At a seminar I attended this evening, a professional trader who trades the silver markets as well, gave his opinion that prices were only correcting. Also, in the latest copy of the Edge, Jim Rogers comments that gold is long overdue for a correction. But we're still looking at a likely rise in prices in the coming decade. If we look at the charts for both gold and silver, I totally agree about the correction being long overdue. However, this correction may provide the ideal opportunity to finally get exposed to the precious metal.

Other ways would be to invest in either a precious metal ETF that tracks a basket of metals or to invest in  precious metal-specific ETFs, like copper ETF, platinum ETF, or silver ETFs, or even the mining company ETFs, or the mining company shares directly. A final way to profit is to trade the metal futures itself.

Aside from precious metals, other commodities like rice, cotton, corn and any other agricultural produce will also rise if and when inflation kicks in. As such, one may profit by either looking into ETFs that track a basket of commodities and agricultural products, ETFs that are agricultural-specific, owning shares of agricultural companies or as mentioned above, trading agricultural futures. 

Do note that like all investments, there are risks involved so I would ask you to seek more comprehensive advice from your brokers. Personally, I prefer investing in silver at UOB bank. However, on the downside, I do wish they sold physical silver instead of paper but I'll make do with what they have. It's just a nice feeling holding physical silver coins in your hand.

Cheers and have a great night,

~K