Palladium Shines: The Overlooked Precious Metal
By Eric J. Fry, Nondollarreport.com
On the road to the 2016 presidential election, all the precious metals slumped…except palladium.
In fact, palladium rocketed 5% higher: its biggest one-day gain in nearly a year.
This industrial metal is becoming increasingly precious. As you can see in the chart above, demand has been climbing steadily higher for more than a decade, while the mined supply of palladium has been ratcheting lower. As a result, the gap between the two has widened significantly.
The story here is pretty simple. The global auto industry consumes all the newly mined supplies of palladium each year. During the last 10 years, demand for palladium from the auto industry has more than doubled.
China is a big part of the reason why. By itself, China has accounted for a whopping 80% of the growth in global auto sales during the last decade.
Auto sales in China continue to motor along in high gear. New car sales in China during the 12 months to November were up more than 10% over the prior year, and double the number sold in 2009.
Palladium is up more than 40% from its January low, and the shares of most palladium and platinum mining companies are also up substantially. Investors who’d like to add some palladium to their portfolios could purchase the Physical Palladium Shares ETF (NYSE: PALL).
Panama: Central America’s Investor Haven
“Ever since I can remember, Panama has been known for two main things: the Panama Canal and offshore banking,” writes Karim Rahemtulla for Nondollarreport.com.
“But this unique Latin American country is becoming a much more diversified investment destination.
“The environment for investing in Panama is quite ripe today. Because the U.S. has pumped billions of dollars into the country over the past 100 years or so, Panama has been able to develop a more stable economy than its neighbors have.
“The canal brings in more than $2 billion a year in toll revenues alone. For a country with only 3 million people, the canal is a windfall that no other Latin American country enjoys.
“Panama is in a sweet spot. It has a ton of infrastructure, a strong financial system and excellent sources of revenues, and it is very accessible for Americans. It could very well emerge as one of the best places to invest in Central America.”
Zinc: Get in on a Serious Uptrend
“Zinc isn’t glamorous like gold or silver, nor is it rare like platinum,” writes Dominic Frisby of MoneyWeek.com.
“But it had a stellar 2016. It’s currently up almost 60% at time of writing.”
“All of the usual factors have been driving the price. First, there’s a lack of supply. China is the world’s top producer, contributing some 37% of global supply. However, last year it shut down some 26 lead and zinc mines for environmental reasons.
“As the zinc supply has dwindled, so the price has risen—and there’s nothing like a rising price to bring in more buyers.
“After iron, aluminum, and copper, zinc is the fourth most used metal in the world. Per year, it is a $34 billion market. To put that in perspective, silver is about an $18 billion market.
“BHP Billiton (LSE: BLT) is the world’s largest producer, although, of course, it produces many other commodities as well, so it is not a pure zinc play. Like zinc, it is in a strong uptrend.”
Copper’s Massive Upside
By Brett Eversole, DailyWealth.com
Late last year, copper ﬁnished one of its largest short-term spikes ever…
The metal went up 18% between late October and late November. And it soared more than 9% in just three days in November. That has only happened a handful of times since 2000. Based on that history, gains of 40%-plus are possible over the next year.
Copper moved sideways for much of 2016. But over the past few weeks of the year, it staged a massive breakout.
History says these extremes tend to happen at the beginning of a major move higher. Similar extremes have led to typical returns of 14.3% in three months…24.8% in six months…and an incredible 41.9% over the next year.
Even more impressive is that 15 out of the 17 previous extremes led to a positive return over the next year. So copper almost always moves higher a year after these quick spikes.
You could trade this extreme by buying the metal. But I prefer to buy the companies that produce the copper instead…
Shares of the iShares MSCI Global Metals & Mining Producers Fund (PICK) are up more than 30% since July… But it’s still early in this trade. The shares are still down 50% from their 2012 levels.
Copper—and PICK—deserve a serious look today.
India Just Got Better
“India has implemented a massive simplification of the tax system that will help cut out bureaucracy, boost profitability, and accelerate growth,” writes Andrew Van Sickle of MoneyWeek.com.
“The plan is to replace hundreds of taxes nationwide with seven GST (goods-and-services tax) categories.
“The reform should free up money and encourage corporate investment. That levies will be the same across India will create a true single market for the first time.
“Throw in India’s promising demographic profile and strong presence in global service industries, and the outlook is compelling. Investors can gain exposure through the New India Investment Trust (LSE: NII), now on a 12% discount to net asset value.”
Greece: Worth the Risk?
“On the first day of 2008, the Greek stock index opened the new year at 1,036 points,” writes Dr. Steve Sjuggerud of DailyWealth.com.
“In early 2016, it bottomed out—at 15. Greece is still down—a lot. The MSCI Greece Index has moved from its all-time low of around 15 to around 20 today.
“I wish I could tell you that I had some special insight into the Greek stock market… But I don’t. All I know right now is that this is likely a ‘Biggest Loser’ moment for Greece—and I know what’s possible after Biggest Loser moments…
“Triple-digit gains are possible. And hundreds-of-percent gains are not out of the question, based on the history of busts as extreme as Greece’s.”
Russia on the Rise
“U.S. stocks are so expensive today that the average annual return from large U.S. stocks is likely to be around -3.7% a year from here,” writes Merryn Somerset Webb of MoneyWeek.com.
“There are still markets that look properly cheap. The obvious one to look at is Russia.
“It is always worth buying bear-market, bottom-priced markets on the basis that, while you might have to wait, barring full-scale wars or communist revolutions, they usually go up in the end.
“And so it is with Russia. Trump and Putin seem keen to get along. And as far as the Russian stock market is concerned that’s good news: The market rose more than 2% following the U.S. Presidential election.”
“The Chinese online travel agency, Ctrip, has recently taken over its number two and number three competitors in the Chinese online travel agency market,” writes Charles Plowden for MoneyWeek.com. “It now has 70% or more of the market share in online travel bookings in China.
“The Chinese are beginning to travel. Their discretionary spending is going up. It’s not just business travel, and it’s not just international. There’s a lot of inward travel for the Chinese.
“And Ctrip, through good operations and good politics, has found itself with the dominant market share in a very immature market. The market’s growing at over 20%. It could grow at 30% a year for the next five years.
“If it does, you will be making multiples of your money on that one.”
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