Worst investment ideas: Commodities
While some financial gurus think commodities will make a comeback next year, others argue against it. "The main argument against commodities is inflation isn't high," says Rehmann's Anderson. Consumer prices rose 1.5 percent in the year through August. "That's not the best environment for commodities," Anderson says. Wage growth is weak, he adds.
Rising demand is necessary to boost commodity prices, but global economic growth isn't strong enough for that now, Anderson says. In October, the International Monetary Fund cut its global growth forecast for 2013 by 0.3 percentage points to 2.9 percent. And it trimmed its forecast for 2014 by 0.2 points to 3.6 percent.
"So what's the impetus to manufacture demand for commodities?" Anderson asks. "Corporate earnings are growing 7 percent, but that's nothing to write home about," he says.
The only bullish argument left for commodities is that the Fed and other central banks are printing money, Anderson says. "This should have put upward pressure on commodities, but it hasn't. It hasn't led to inflation," he says.
"Money has to be spent. Some is being spent on stocks, but not on commodities. Until inflation moves up, I don't see a move up for commodities."