Sunday 17 July 2011

Turnaround commodity investments


Commodities have been one of the few bright spots that are ensured a good future over the next decade or two. While there has been a resurgence in equities, there can be no doubt it's short lived, as there's nothing but dubious reasons why they are going up, and a correction is all but a surety in the short term.

Commodity futures are a way you can enter into commodity tips by investing directly into the commodity itself, with no concerns other than the performance of the commodity in relationship to supply and demand. This is a way many investors prefer to do business, as it's simple and the specific commodity tips only has to be watched, and not management teams and all sorts of other problems connected to a business.


While nothing will ever go straight up as far as an investment goes, there should be significant upward movement in almost every commodity category and sector for years; some will of course far outperform others, and so you would want to put different weights on various commodities in order to reflect that reality.

In other words, you might put 15 percent of your commodity investment in sugar and copper, maybe 12 percent in silver, etc. These aren't recommendations, just an example to show you what I'm talking about.


When you invest in commodities you look primarily as supply and demand and the market forces involved, so you should at least have a decent understanding of that, and so invest in ways that reflect not only demand, but if that demand can be met. If the demand can't be met for a certain commodity, then you could have a great opportunity for commodity prices to go up.

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