Are you worried about the BHP Billiton Limited share price?

The BHP Billiton Limited (ASX: BHP) share price has tumbled 10% in three months.

BHP Share Price

Source: Google Finance

Overnight in London, the BHP share price was rocked again — falling another 3.5%.

Is the BHP Billiton share price safe?

BHP’s most recent selloff comes on the back of a decision by UK Prime Minister Theresa May to call for a general election ahead of the country leaving the European Union.

It also comes as the iron ore price – and the prices of many other commodities – continues to be sold off. Overnight, iron ore prices fell 4.6% to $US63.20 a tonne, according to The Metal Bulletin

In February, iron ore prices traded over $US90 a tonne!

Some experts say $US60 per tonne is a much more sustainable level for iron ore prices.

However, in my opinion, the random ups and downs in commodity prices only serve to highlight that shares of BHP, Rio Tinto Limited (ASX: RIO) and Fortescue Metals Group Limited (ASX: FMG) are inherently less reliable than other blue chip companies, like Woolworths Limited (ASX: WOW).

While BHP Billiton produces a basket of commodities, predicting the price of one of them is tough enough — let alone four or more.

Metal Price Index


Foolish Takeaway

The recent falls in the price of resources shares serve to remind us that they should be considered riskier propositions than other companies, which can dictate the price of their products and therefore control supply.

While BHP shares have performed well over time, right now, I think there are better dividend shares on the ASX…

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Motley Fool Contributor Owen Raszkiewicz does not have a financial interest in any company mentioned. Owen encourages your feedback. You can follow him on Twitter @OwenRask.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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