FXTM information and reviews
OctaFX information and reviews
XM information and reviews
FXCC information and reviews
FxPro information and reviews
HFM information and reviews

The Jim Rogers' Take: Financial Markets & Commodities

10 November 2022

Against the current turbulent geopolitical backdrop, legendary commodity expert Jim Rogers sheds some light and gives his opinion on geopolitics, the stock market, commodities, and hedging risk in an exclusive interview with Vantage. Rogers also shares his invaluable experience based on past financial events that could provide insights to the future of the financial markets. Here are the key takeaways from our interview with Jim Rogers.  

Current global monetary policy is "really bad"

According to Rogers, the current economic climate is in an unprecedented state where in recent years central banks in major economies have done quantitative easing at a level not seen historically. Rising inflation and aggressive interest rates hikes have also been plaguing the economy. As a hedge against this economic backdrop, Rogers’ portfolio consists partially of the US dollar. His reasoning is that the US dollar is considered a traditional safe haven by investors in times of turmoil. However, his financial experience has also led him to take note of the potential over-valuation of the US dollar, and when the time comes, he will be looking to sell.  

When asked to comment on how aggressive the Feds should be with interest rates, Rogers chose not to comment but rather, gave a historical example of the “Great Inflation” that occurred in the 1970s. At that time, the Fed had to raise interest rates till 21% to bring inflation rates down to acceptable levels, which according to Rogers, worked well and managed to kill inflation. To see a potential shift in the markets, Rogers emphasized to keep a look out for potential wars, a re-emergence of Covid, and major central banks interest rate hike cycles.  

“They got to keep an eye out for war, because if we have world war, that’s going to have a big effect. We have to watch the virus, if the virus comes back, that is going to have major effects as well. And we have to watch the central banks. If the central banks are serious, and if they raise the rates, that’s going to have a major effect on markets.” 

Stock markets have not "bottomed out"

Through his lifetime of financial experience, Rogers has been through many forms of bear markets. More specifically, Rogers pointed to the growing amount of debt in major economies which contributes to the intensity of the stock market bears. When asked about the stock market bottom, Rogers firmly said that the bottom is not near and in order to have an indication on where the bottom is, markets must first reach a stage of despair. However, Rogers was also quick to correct the saying “the stock market always goes up”. 

“It is not always the case that stock markets go up. The saying that stock markets always go up, maybe they have in the end, but in the end can be a long time.” 

In addition to the economic pessimism, Rogers added that before the worst is over, companies will go bankrupt.  

OPEC and the future of clean energy

With the OPEC oil supply cut looming, Rogers’ focus is the overall supply and demand of oil in general. According to Rogers, the OPEC and their meetings does not have as much influence on oil prices as people might think and prices are dictated by overall supply and demand changes. Rogers pointed out that over the years, known oil reserves have been declining, especially in Saudi Arabia, and that the consumption of oil in major economies has increased, which will lead to higher oil prices in the future. With many governments globally heading towards a clean energy future, Rogers is supportive of the clean energy initiatives but mentions that for further improvements, the clean energy markets must be competitive – which does not seem like the case at this point.  

Diving deeper, when asked if clean energy could one day replace oil, Rogers said: “If we all do have electric cars, electric cars use several times as much copper, lead, and lithium as petrol cars. So, what we give up on one side we pick up on the other. Maybe prices of oil will go down and prices of copper will go through the roof.” 

"Not the time" for precious metals. Yet.

With the fears of recession growing in tandem with each interest rate hike, Rogers spoke about the gold and silver investments in his portfolio. The commodity expert noted that although he has these precious metals as investments, he is currently not looking to buy or sell any. However, if given the opportunity, Rogers would look to silver instead of gold. The reasoning Rogers gave is that silver has peaked $50 twice and is trading at approximately $17 at the time of the interview. Although silver’s all-time highs are three times current day prices, with the appropriate market conditions, silver could easily re-visit its $50 high or further.  

“If I were buying either of them, I’d buy silver because silver is much cheaper on a historic basis. I’m waiting to buy at some point. I hope things get so depressed in both gold and silver that I will buy more.” 

With precious metals losing their shine currently, the question of alternative safe havens was posed. Rogers reciprocated the question with sage advice: no matter the instrument, buy at the right prices and conduct proper research. With those two considerations, exposure to most instruments might not be as risky. Following the advice, Rogers used the soft commodity sugar, to illustrate. When sugar prices were at 67 cents years ago, it was considered a risky investment, but when prices declined to 2 cents, the level of risk for investing sugar dropped.  

“If you get the price right and the fundamentals right, there is less risk no matter what you’re doing.” 

Smartest thing to do? Hedge risk.

Many investors are looking to hedge against the high inflationary backdrop by investing in precious metals such as gold and silver. When asked about hedging risk, Roger said: 

“If people know what they’re doing, hedging risk is always a smart thing to do”. 

To reiterate Roger’s opinion on trading at the right price and conducting proper research, Vantage offers CFD trading which allows traders to go long or short on various asset classes. You can also access free educational articles on our Academy or sign up for weekly Webinars to learn from experienced traders. James Beeland Rogers Jr., commonly known as Jim Rogers, is an American veteran investor, Chairman of Beeland Interests Inc. and financial author who co-founded Quantum and Soros Fund Management. He also launched the Rogers International Commodities Index in 1998. 


Share: Tweet this or Share on Facebook


WN04 data: Oil and Gold price
WN04 data: Oil and Gold price

This preview of weekly data looks at USOIL and XAUUSD, where both commodities seem to pause their aggressive bullish rallies following the thinning trade volumes of the Chinese New Year...

26 Jan 2023

Gold trading in 2023: Is now a good time to invest?
Gold trading in 2023: Is now a good time to invest?

Are you thinking about investing in gold in 2023? With the increasing financial uncertainty around the world, many traders are looking to gold as a safe-haven asset...

26 Jan 2023

Stocks in a Rally!
Stocks in a Rally!

USDIndex settled at 101.50, Wall Street rallied on the back of tech amid ongoing hopes for a downshift in Fed rate hikes amid a potential moderation in inflation this week...

25 Jan 2023

USD Index remains under pressure near 102.00
USD Index remains under pressure near 102.00

The index kept the consolidation well in place near 102.00. The resumption of the risk-on mood weighs on the dollar. Flash Manufacturing/Services PMIs come next in the US docket...

24 Jan 2023

USD Index remains under pressure below the 102.00 mark
USD Index remains under pressure below the 102.00 mark

The US Dollar started the new week under modest bearish pressure and the US Dollar Index declined below 102.00 during the Asian trading hours on Monday...

23 Jan 2023

Ford shares and trucks are getting traction in 2023
Ford shares and trucks are getting traction in 2023

In just two weeks, Ford shares (F) soared from $10.86 (USD) to $13.42. Traders are wondering what’s causing the surge and whether it will continue throughout 2023...

23 Jan 2023

Editors' Picks

FXCM information and reviews
ActivTrades information and reviews
RoboForex information and reviews
MultiBank Group information and reviews
MultiBank Group
Libertex information and reviews
Vantage information and reviews

© 2006-2023 Forex-Ratings.com

The usage of this website constitutes acceptance of the following legal information.
Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website (reviews, brokers' news, comments, analysis, quotes, forecasts or other information materials provided by Forex Ratings, as well as information provided by the partners), including graphical information about the forex companies, brokers and dealing desks, is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Forex Ratings shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about the forex companies. The entire responsibility for the contents rests with the commentators. Reprint of the materials is available only with the permission of the editorial staff.
We use cookies to improve your experience and to make your stay with us more comfortable. By using Forex-Ratings.com website you agree to the cookies policy.