commodities

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slabinja's picture
slabinja
Status: Bronze Member (Offline)
Joined: May 27 2008
Posts: 46
commodities

Does anyone have an suggestions about investing in commodities?

Any opinions, input would be appreciated.

capesurvivor's picture
capesurvivor
Status: Platinum Member (Offline)
Joined: Sep 12 2008
Posts: 963
Re: commodities

You don't want to learn how to invest in commodities from a website, IMHO, even among friends. The major way is in the futures market, where you can buy futures and options on futures. I spent some time doing that; it is not for casual players. They always lose. Taking a course about them from people who are not trying to enroll you in anything further else is an option.

There are exchange traded funds (ETF) that are mutual funds may be reasonable alternatives for you, (especially in an IRA). Many major mutual fund families have them..check out DBA, RJA, UNG...these all are from different families and track different commodities. I am not recommending them, just giving you some to check out, find the families they belong too, and do a bit of research. Others here may have additional advice.

Good luck.

 

SG

slabinja's picture
slabinja
Status: Bronze Member (Offline)
Joined: May 27 2008
Posts: 46
Re: commodities

Thanks capesurvivor.

I'm primarily looking for ideas so I appreciate your input.  My main concern was the dollar losing its value.  Besides gold and silver, commodities looks like an alternative.  I know nothing about them and would like to do some research.  It sounds like ETFs are a good direction since I am not cut out for any heavy trading.

capesurvivor's picture
capesurvivor
Status: Platinum Member (Offline)
Joined: Sep 12 2008
Posts: 963
Re: commodities

You'll find a lot of thoughts about the gold ETF, GLD, and silver ETF, SLV. on this site. Many folks see them as excellent vehicles to track those metals; others fear they don't actually have all of the underlying metal somewhere to back it up. I have owned each at different times, now use a few individual gold and silver stocks to track those markets.

 

SG

Denny Johnson's picture
Denny Johnson
Status: Gold Member (Offline)
Joined: Aug 13 2008
Posts: 348
Re: commodities

I am not a sophisticated enough investor/trader to use futures and options, but have believed in the fundamental Precious Metal story for several years and am an ETF fan.

I, like capesurvivor, have owned GLD and SLV, but am no longer comfortable w them. I now use GDX, a gold miner ETF, for most of my PM investment after a comfortable holding in the physical metal. 

I have been giving a lot of thought to 'what next', when in my mind, PMs start to lose their luster. Have concluded that energy and food are areas that probably have more upside than down. Though I believe that PMs still have a good run ahead, I've started to diversify w DBC, and will probably be adding some DBA to achieve a 50/50 mix of food and energy.

Note that there is a difference, probably worth researching, in ETFs and ETNs {looks like RJA mentioned earlier in this post is an ETN}

Here's a list of commodity ETF/ETNs which may be of help:

http://etf.stock-encyclopedia.com/category/commodity-etfs.html

I find this site helpful for an overview of ETFs, this page shows DBC:

http://www.etfconnect.com/select/fundpages/etf_funds.asp?MFID=153467

If you have an online broker, their RESEARCH area should be of help.

Good luck

 

slabinja's picture
slabinja
Status: Bronze Member (Offline)
Joined: May 27 2008
Posts: 46
Re: commodities

Thanks for your input D.J., I'll make use of those links.

SteveS's picture
SteveS
Status: Gold Member (Offline)
Joined: Sep 6 2008
Posts: 358
Re: commodities

What about oil (like the USO ETF)?

It seems oil is maybe the most underpriced commodity, though with some reason, due to decreased demand. But my understanding is that new supply has fallen behind demand, so maybe it would not take much to make oil take off. I don't very much about ETFs, so any insight is appreciated. I have heard that the USO ETF suffers from the need for it to renew contracts each month, so it can't fully benefit from long term price rises?

capesurvivor's picture
capesurvivor
Status: Platinum Member (Offline)
Joined: Sep 12 2008
Posts: 963
Re: commodities

I have been in USO for a while, long enuf to watch it crash. They say that smart hedgies are able to keep it below USL, a competitor, because of those expiring contracts. IDK. You can shop them against each other. Friday each went up about the same % and USO is a bit cheaper to get into.

You can get COP or XOM, excellent but expensive oil companies, but they pay a dividend.

 

SG

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