A trader works on the trading floor of the Multi Commodity Exchange of India in Mumbai, India. (Photographer: Amit Bhargava/Bloomberg News)    

Commodities Are `Screaming to Be Bought' on Valuation to Stocks

(Bloomberg) -- Commodity prices have been left in the dust this year as assets like equities and cryptos surged ahead. That’s signaling to some traders that a comeback could be in the works.

The Standard & Poor’s GSCI Total Return Index, which tracks 24 raw materials, is hovering near a record low valuation relative to the benchmark S&P 500 U.S. stock index. That suggests a major and extended 10-year bull market run starting in 2018, said Shawn Hackett, the president of Hackett Financial Advisors in Boynton Beach, Florida.

"In 2008 stocks were screaming to be bought on this valuation metric, and that was proven correct," Hackett said in a note to clients late Monday. "We now have the exact opposite condition where commodities are screaming to be bought at the expense of stocks."

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