Take off the bitcoin blinders, here are the big investments to watch for 2018

As 2017 comes to a close, the investment landscape might look slightly different from what many were envisaging at the start of the year.

A record-busting climb for stocks looked shaky early on. And the nosebleed gains for cryptocurrencies has morphed into an actual obsession. But there was a time not too long ago when investors spent a lot of time chattering about other assets, such as commodities — recall that oil had a spectacular run in 2016, while gold was also a big winner.

Our call of the day, from IG’s chief market strategist Chris Weston, says next year may be the time to refocus on these assets.

“I do think the commodity trade is one we need to watch and while liquidity is obviously an issue, this is an asset class that is hot at the moment and could really dictate inflationary trends in 2018, where inflation, volatility and the [U.S. dollar] hold the key to the capital markets,” Weston said in a note to clients Wednesday.

He makes that remark amid some multiyear highs for some commodities, such as oil CLG8, -0.30%   and copper HGH8, +0.26%  . “So if one is holding a long position in Brent LCOH8, -0.39%  , U.S. crude, heating oil, copper, aluminum or silver SIH8, +0.58%  , or exposed to these commodities through equity, then your Christmas has just been extended a little longer,” he added.

A pipeline explosion in Libya sent crude prices to 2 1/2-year highs on Tuesday, though those gains were paring back a bit this morning.
According to the JBC Energy Research Center, investors particularly may want to watch their step where oil is concerned right now. They note that in recent years, the end of the year has often meant “a period of sizable moves that eventually proved to be unsustainable, especially since they explored the extremes, or the beyond thereof, of recent trading ranges.”

In a note, JBC said it seems a bit excessive that a Libya pipeline explosion really merits a $2 per barrel higher move up for oil prices versus the end of last week. In short, they say this could be the fourth straight year when the upcoming turn of the year “offers a good opportunity to start fading the market.”