The dubious nature of the world economic recovery dictates that investors should dump bonds and snap up commodities, says investment legend Jim Rogers.
He doesn’t believe in the bond rally that sent the 10-year Treasury yield to a 14-month low of 2.88 percent July 1. And Rogers sees the recent decline of many commodities as a buying opportunity.
“Bonds are not a good place to invest in,” Rogers said at a recent conference, Bloomberg reports.
“You should own commodities because that’s your only refuge.”
He sees gold eventually rising above $2,000 an ounce. It recently traded at $1,212.
“I do own gold,” Rogers said. “Gold has been extremely strong of late, but I’m not rushing out to buy gold. I don’t like to buy things that have been going straight up.”
The precious metal hit a record high of $1,265 in June.
Meanwhile, silver stands 60 to 70 percent below its zenith, making it a better value play, Rogers says. He also favors platinum and palladium.
But Rogers likes agricultural commodities, such as sugar and rice, even better than metals, because agriculture prices are even more depressed.
“Not many things are 75 percent cheaper that 36 years ago, but that’s true of sugar,” he said.
Some disagree with Rogers that economic uncertainty is bad for bonds.
“We’re not in the camp that thinks the Treasury market has become overvalued,” Chris Diaz, a portfolio manager at ING, told The Wall Street Journal.
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