Vehicles for Investing: Commodities or Commodity Companies?
by John Stephenson
The global economic order is rapidly changing—creating tremendous opportunities for commodity investors.
Demand for commodities continues to grow despite the fact that much of the world is still licking its wounds from the global economic collapse of 2008–2009. Western governments have tried to paper over the problem of sluggish consumer demand by implementing stimulus programs intended to jump-start infrastructure spending—for example, the Cash for Clunkers rebate scheme aimed at the beleaguered American car industry. But despite these efforts, the collective credit cards of the U.S. and much of Europe remain completely maxed out.
In this article
- Dumb Luck
- Go Along to Get Along
- Hot Commodities
- Ready to Rock ‘n’ Roll?
- Managing the Future
- Company Man
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The wheezing Western recovery aside, demand for commodities remains strong. Commodities are a big deal, much bigger than most people realize. Primary commodities, such as iron ore and copper, account for 25% of global trade. Supply has been sidelined during the global economic collapse, creating a near perfect storm for investors—a situation that is likely to last for many more years. As the basic feedstock for industrial and urban growth, commodities can be red hot even when stocks and bonds are ice cold. And with their direct link to the drivers of inflation, commodity investments are a heaven-sent hedge against rising prices.
Despite these benefits, commodities tend to be grossly underrepresented in most investment portfolios. To be a total investor is to know something about commodities—especially with a commodity bull market washing up on our shores. Yet commodities are a mystery to many investors: Most haven’t a clue how to begin.
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Discussion
A nice and informative article. It brings practicality to a confusing investment arena. I have been debating how to get some commodity representation into my portfolio and now have a practical method of initiating it.
posted over 2 years ago by Walter from Texas
I concur with Walter. A half dozen commodity producer ETFs or a link to them would have been helpful to the interested, uninitiated reader.
posted over 2 years ago by Richard from Ohio
The article is not esp. helpful since, as mentioned by others, it does not provide info on which ETFs would be most appropriate. There are dozens of commodity ETFs, but which would be the best that actually buy companies rather than futures? Article is a bit cute rather than down to earth.
posted over 2 years ago by James from South Carolina
The key to most successful commodities investing involves the use of ETF's. The article was sorely lacking in not discussing the available commodity ETF's, their components and performance.
posted over 2 years ago by Lary from Colorado
This is an informative article to say the least. But I would like to finish the book mentioned!
posted over 2 years ago by Andrew from Florida
Give me a stock or ETF you would recommend.
I have [MOO] ETF. PLEASE EMAIL ME YOUR SUGGESTION!!!
BEST REGARDS,
WARREN BEELER
PHONE 423-0478-1374
FAX 615-346-9203
EMAIL wrbeeler1@msn.com
posted about 1 year ago by Warren from Tennessee
