Betting on commodities has historically been a good move, and plenty of individuals have considered investing in commodities since the economy tanked. Serious investors will find that having multiple commodities in their portfolios will seriously cut down on that looming portfolio risk because it balances out the rollercoaster ride we’re familiar with seeing in stocks and bonds. Something like gold and oil could bring a nice level of stability to any investor’s repertoire, but how should you go about investing in commodities?

The easiest way to get involved in commodities investments is to look into commodity markets. These markets make it easier for the everyday Joe to invest without requiring the extensive knowledge that this sector once required of investors. Many beginning investors opt for something called futures contract which is essentially an agreement the investor makes to buy or sell specific quantities of the commodity in the future. The types of commodities available in futures contracts are gold, natural gas, crude oil, corn, and cattle. It may be easier to invest in these types of commodities if the investor is an active user of or participant in the specific commodity. Many individuals who participate in this sector are speculators.

The future market is prone to volatile swings, however, and stocks may be a better investment. Carefully research companies to make sure they would be good investments, and determine where you would like to focus your portfolio. Oil companies, for example, have stocks in tanker companies, drillers, oil refineries, etc. These stocks are easier to trade and buy and fit right in with an already established brokerage account. Public information on these companies is readily available but the stock price has the potential to be influenced by market conditions and other company-related factors.

An exchange-traded fund is another option. ETFs trade exactly like stocks and allow the investors participation in commodity cost fluctuations. Similarly, exchange-traded notes mimic commodity price fluctuation. These are unsecured debts that do not require brokerage accounts. There are also no fees to deal with or management hurdles. Mutual and index funds are other commodity options that deal with industries like agriculture, mining, and energy, although management fees could be high and funds often come with fees. Alternative energies is one sector that is up-and-coming, so investing in solar, wind, and other types of alternative power may be a smart move at this point. Beginning and experienced investors have a variety of investments in commodities to consider.

On March 14, 2012 By Richard Wilson

Practice Test

Investing in Commodities – An Investment to Trust

In the world of finance and investment, the number one rule you’ll hear is to diversify, diversify, diversify. Along with that, you’ll hear plenty about hedging investments and putting a good bit of your investments into areas that have little risk and a solid history. Investing in commodities is likely to be the very best choice for you to pursue if these are factors that you’re looking to add to your portfolio. Of all the various investment options out there, very few can compare with the track record that investing in commodities can bring to the table. There are plenty of options and plenty of reasons why you should think about doing so yourself.

The main reason that every investor should at least think about investing in commodities is simply that they’re a finite resource. It’s getting harder and harder to recover gold, oil, and other commodities from the earth. And as they become scarcer, the price will obviously continue to go up accordingly. Even food based commodities are among the most important investments you can consider since they’ll actually influence many different branches of the nation’s economy. In other words, whether you’re buying wheat or gold, oil or potatoes, you’re buying something that not everyone will be able to purchase.

It’s also important that you take a good look at the volatile nature of investing in commodities. These should be thought of in most cases as long term investments, and you may very well find yourself riding a roller coaster when you invest in them. Highs and lows, climbs and drops will be common throughout the duration of your holding, but in most cases they’ll balance out and, in the long term, end up being as stable as or more stable than nearly any other type of investment. And investing in commodities like oil or gold is even more worthwhile and secure.

Finally, if you’re investing in commodities you’ll want to remember that age-old adage and diversify. That means don’t just invest in corn or oil – buy mutual or ETFs that cover several different commodities instead of just one. No matter how valuable and stable you think a certain commodity is, spreading out your choices to include several different types of commodities will ensure a much more stable ride during the time span in which you hold onto your investment. Investing in commodities is a great idea, but keep these tips in mind.

On March 12, 2012 By Richard Wilson

Practice Test

Investing in Commodities – Watching the Commodities Markets

Investing in commodities can be a frustrating an exciting way to make money as an investor. It can be frustrating because it can sometimes be difficult to forecast what commodities prices will do and what factors will influence them. But investing in commodities can be exciting because if you hit on a winning investment, then it could be a big windfall. Commodities investors help to shape the prices of the things that people use every day. It is an incredibly important responsibility to be a responsible and ethical commodities trader. It can take a long time to be able to understand and work with the different commodities markets, and it is a type of trading that you never feel totally comfortable with no matter how much experience you have.

One of the ways you could be investing in commodities is to deal in foods such as grains, meats, fruits and vegetables. Each of those main categories is broken down into subcategories that all have their own market such as orange juice, breakfast cereals and pork bellies. When you are investing in commodities such as this, you need to keep yourself updated on buyer’s trends and market trends as well. Weather, product recalls and competition all work together to create shifts in these market prices. Watch the weather reports, read the almanacs and use whatever slight advantage you can find to help you make money in the food commodities markets.

If you like investing in commodities that have a significant effect on economies all over the world then you should consider getting involved in the precious metals markets. Gold, silver, platinum and other precious metals can help dictate currency prices all over the world. Investing in commodities like precious metals requires a talent for forecasting and a comprehensive understanding of the world’s economies. It can be an exciting market to trade in, but it can also be the kind of market where an inexperienced investor could lose a lot of money.

Investing in commodities using the futures market is the kind of investing that can have long-term effects on a lot of people. Commodities such as natural gas and crude oil are traded on futures, and the results of investing in commodities like these can dictate gas and home heating energy prices for months to come. These are the kinds of trends that investors and consumers watch very closely to see what everyone will be paying to fuel up their cars in the coming year.

Login / Register

Investing in Commodities – Something for Everyone

Investing in Commodities – An Investment to Trust

Investing in Commodities – Watching the Commodities Markets

Contact

Certifications

Company

Login / Register

Contact

Certifications

Company

Save your cart?