Commodity investments / Recession

[PrefInvestor]

Hi All, Lots of talk about a possible upcoming recession ATM. And commodities aren’t a great place to invest during a recession cos nobody wants resources as growth is slowing right ?. When I set up my current diversified portfolio I included an allocation to commodities, I have two investment trusts BERI and CYN and an AIM index copper miner CAML. None of them are doing that great what with the US China trade war and all, but of course if that blew over they would likely do well. Considering selling and moving to possibly safer ground ? (wherever that might be !).

Appreciate any informed comment ?.

ATB

Pref

[Spet0789]

Can’t comment on the other investments but I also hold CAML and wouldn’t sell it. I am considering adding. Great company which will be profitable and paying dividends at any level of metals prices.

[PrefInvestor]

Can’t comment on the other investments but I also hold CAML and wouldn’t sell it. I am considering adding. Great company which will be profitable and paying dividends at any level of metals prices.

Hi Spet0789, Well I think CAML is a good company but having bought at around 226 and received a few dividends I am about 15% down now on a Total Returns basis. I see no immediate prospect of improvement UNLESS the US trade deal gets done, which isnt looking likely to me. If we do go into recession then I can see this just falling further. Next dividend is not till October and given their dividend policy it is quite likely to be cut IMV. I operate a personal policy of selling anything that gets beyond about 10% down in TR terms, so I am a way beyond that (CAML is my worst performing investment).

Some seem to operate to a policy of topping up on stocks that fall as this has done, sounds like you are one of that group ?. But to me it seems like throwing good money after bad (perhaps). My policy is normally to exit and only buy back in when I can foresee that the investment has genuine near term upside potential. Of course I might miss a good re-entry point, but I also miss out on those situations where you end up ENORMOUSLY down as the stock keeps dropping. Many will have experienced this with the likes of BT, VOD, CNA and more - you hold (or even average down) because you have faith that the company is going to bounce back. Fine if it does - but REALLY bad if it doesnt, then you end up trapped in a really losing position which it might take you years to escape if you ever do. I prefer to exit and take my chances elsewhere, as indeed is my plan on this occasion !.

GL with CAML. I am planning to cut my losses and try my hand elsewhere.

ATB

Pref