Why Commodities Are Undervalued Against the Stock Market and Why You Should Care

By Ludger J. Borger

President, Borger Capital Group LLC

You know, when most people think about investing, it’s stocks, stocks, stocks. That’s all you hear about. It’s like the stock market gets all the attention while commodities just sit quietly in the background, like that introverted kid in the corner who knows something no one else does.

But here’s the thing: commodities—things like silver, oil, and agriculture—are incredibly undervalued right now compared to the stock market. And that’s where the opportunity lies.

Stocks vs. Commodities: A Lopsided Relationship

Over the past decade or so, the stock market has been on fire. Everyone’s been making money hand over fist as stock prices soared. But while that’s been happening, commodities have stayed pretty flat, or in some cases, even gone down.

Why? Because when the stock market’s booming, investors tend to ignore commodities. They’re looking for growth, and they think that’s only going to come from companies selling products and services, not raw materials. But this has created a huge imbalance—stocks are priced high, and commodities are still sitting low.

And that’s a pattern we’ve seen before. The thing is, these cycles always correct. Historically, when commodities are this cheap relative to stocks, it doesn’t stay that way for long.

Commodities Have Real, Tangible Value

Let’s talk about why commodities are different. Stocks are essentially a bet on future growth. You’re buying into the potential of a company to make money down the road. And sure, that can pay off big, but it’s also built on speculation. Commodities, on the other hand, have intrinsic value. They’re real, tangible things that the world needs—whether it’s oil to fuel the economy or gold and silver for

use in everything from electronics to jewelry. You can’t just snap your fingers and create more of these resources. There’s a finite supply, and getting them out of the ground is getting more expensive and challenging. That’s why, when demand spikes, prices can jump quickly.

Right now, though, commodities are priced way below what they should be when you compare them to stocks. Silver, oil, timber—they haven’t kept pace with the rising stock market, but that doesn’t mean they’re any less valuable. If anything, they’ve become more valuable as inflation eats away at the purchasing power of money.

The Turning Point Is Coming

Here’s where it gets interesting: stocks can only go so high before they start to look overvalued. And with the world still dealing with supply chain problems, inflation, and economic uncertainty, commodities are starting to look like a much safer bet. When inflation sticks around, the cost of raw materials rises. The price of oil goes up. The price of gold and silver go up. Why? Because these things are needed, and you can’t just create more out of thin air like you can with money. But right now, commodities are still priced low compared to stocks, which makes them a fantastic opportunity. It’s like buying something before everyone else realizes how valuable it really is.

So, What Should You Do?

If your portfolio is all about stocks, now’s the time to rethink things. Stocks have had a great run, but history tells us that they can’t stay elevated forever—especially when commodities are this undervalued.

Silver, oil, timber, agriculture—these are assets that hold real value, no matter what happens in the stock market. And with everything going on in the world today, from geopolitical issues to inflation pressures, commodities are poised for a rebound.

Bottom line: while everyone else is distracted by the highs of the stock market, commodities are quietly sitting there, waiting for their turn. And when that turn comes, you’ll be glad you noticed before everyone else.

If you want to discuss your personal situation in more depth, I’m here to help. Schedule a free 30-minute strategy call here, and together, we can find the best course of action for your specific circumstances.