I asked a portfolio manager yesterday what he thought of the financial crisis, and he quickly replied, "I had nothing to do with it." Although good for a chuckle, the statement also contains a timely lesson for every Fool: Be defensive.
When economies get into trouble, many investors seek the relative safety of hard assets. Following the late-summer launch of the Market Vectors RVE Hard Assets Producers ETF
Commodity equities have been anything but safe lately, as these sectors have been taken to the cleaners. This monstrous correction comes as no surprise to Rogers, legendary co-founder of the Quantum Fund. In Jim's words:
We have had eight or nine periods of forced liquidation over the past 100 to 150 years wherein everything was liquidated without regard to fundamentals. This is such a period. ... Historically, the things which have come out best on the other side are things where the fundamentals have been unimpaired. Commodities are the only thing I know with unimpaired fundamentals.
I would augment that statement by suggesting that some commodities will be slower to rebound than others. Nonetheless, this exchange-traded fund (ETF) contains a formidable list of names among the top 10 holdings, with a notable emphasis upon oil and agriculture. Fools who believe that oil will resume its bull run will appreciate the exposure to ExxonMobil
For those nutty enough to think that food may be important in the future, the fund includes familiar names from the presummer agriculture rally, including Potash Corp. of Saskatchewan
While I have deep respect for Jim Rogers, and I do not doubt that the Market Vectors ETF will reverse course and ultimately outperform the broader markets for a while, I believe that investors could do even better with an independent approach capitalizing on the range of resources at The Motley Fool. The Motley Fool Income Investor newsletter service -- with recommendations like Petroleo Brasileiro
Fool contributor Christopher Barker thinks his head is harder than most assets. He can be found blogging actively and acting Foolishly within the CAPS community under the username TMFSinchiruna. He owns no shares in the companies mentioned. Petroleo Brasileiro is a Motley Fool Income Investor recommendation. Try any of our Foolish newsletters today, free for 30 days. The Motley Fool has a granite disclosure policy.