Thursday, May 7, 2009

Commodities

This latest market rally has been pretty good across the board. Many commodity-based mutual funds and ETFs have seen significant gains in the last several weeks. They should hold up better, as well, if the market takes another dip going into the summer months.

Wednesday, March 18, 2009

Commodity ETFs and Mutual Funds

There are many commodity-based ETFs and Mutual Funds that investors can purchase without having to worry about all the restrictions that hedge funds often have attached to them.

Some of the commodity ETFs include the following that may invest in gold, silver, grains, or even strategies like long-short, market neutral, or sectors like private equity and venture capital investments. These ETF's change every day, so check with your investment adviser to see if any are appropriate for your portfolio.

ETFS:
E-TRACS Constant Maturity Commodity Index ETN (UCI)
ELEMENTS Rogers International Commodity Index ETN (RJI)
ELEMENTS S&P Commodity Trends Indicator ETN (LSC)
Goldman Sachs Commodity Index (GSCI) Total Return Index ETN (GSP)
GreenHaven Continuous Commodity Index Fund (GCC)
iShares GSCI Commodity-Indexed Trust ETF (GSG)
PowerShares DB Commodity Double Long ETN (DYY)
PowerShares DB Commodity Double Short ETN (DEE)
PowerShares DB Commodity Index Tracking Fund (DBC)
PowerShares DB Commodity Long ETN (DPU)
PowerShares DB Commodity Short ETN (DDP)
ProShares Ultra DJ-AIG Commodity ETF (UCD)
ProShares UltraShort DJ-AIG Commodity ETF (CMD)

Tuesday, February 24, 2009

So What are Commodities and should I invest?

One of the characteristics of a commodity product is that its price is determined as a function of its market. Well-established physical commodities have actively traded cash and derivative markets. Generally, these are basic resources such as oil, coffee, grains, soybeans, copper, gold, silver, tin,aluminum, and many others.

Many feel that investments in these products will be greatly rewarded with the investment stimulus bill that is going through congress. And since the economy seems to be investing "green" many commodities are now tied to these new investment products.

Commodity investing tends to be riskier than traditional stocks and bonds since they are often based on futures contracts, or options. These financial instruments tend to be very highly leveraged, so you can make a lot, or lose a lot of money very quickly. Lately, though, mutual funds and ETFs have created commodity-based investments that trade just like any other fund. They still tend to be risky, though, as the underlying investments themselves may be levered.

Many advisors use commodities as a part of an asset allocation program, since they can often move in opposite direction of the market (SP, Dow, etc.) Investors still need to be careful though, and work closely with their financial planner to determine if these investments belong in their portfolios.

Saturday, January 24, 2009

Welcome to Investing In Commodities

Welcome to the Investing In Commodities blog. We created this resource for both financial professionals looking for the latest investment news on commodities, as well as the casual investor that may be looking at these investments to add to his portfolio.

Commodities cover a wide range of investments from hedge funds to mutual funds to ETF funds. Many investors do not even know the definition of commodities, let alone how to go about actually buying an appropriate investment for their account. We will try to dispel myths, as well as point out investment opportunities.

Commodities themselves have evolved as the world has changed. Corn, soybeans, wheat used to be the most common commodities. Now there are many green commodities such as carbon offsets, wind power, weather-related products, and many more variations.

It can be confusing for investors to sort it all out, so it makes sense to work with an investment advisor to help guide you through the different investments.

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