Gold Alternative #5: Copper
You don’t have to roll thousands of pennies to get in on copper — although you could. The metal has a few things going for it: affordability, liquidity, flexibility. Plus, it’s a good conductor or electricity, so you can find it in everything from electronics to pipes in your home.
Yes, copper is much more of a staple than the metals found in fancy gadgets — an industrial recovery simply cannot happen without it. And with homebuilder confidence on the rise, on top of lower supply and rising demand, copper could be on its way up — despite the fact that China, the metal’s biggest customer, still faces slow near-term growth. Copper hit multiyear highs around $4.50 a year ago, but has since dropped off by about $1.
One option to play copper is the iPath Dow Jones-UBS Copper Subindex Total Return SM ETN (NYSE:JJC) — unlike the other trusts, though, JJC doesn’t actually hold copper; as an exchange-traded note, it’s instead a debt security that merely tracks the price of copper. The fund is down a little more than 1% year-to-date, and saw a bigger hit over the entire past year. The PowerShares DB Base Metals ETF (NYSE:DBB) is divided evenly between copper, aluminum and zinc, and has moved similarly to JJC in the past year.
As of this writing, Alyssa Oursler did not own a position in any of the aforementioned stocks.