March 8 2010 by
Ahmad A Hassam in
commodity |
Everyone knows what a stock index is. It is price weighed or value weighted measure of a basket of stocks. Indexes are very important in the world of investing. If you want to invest in commodities, you should invest in a commodity index.Just like other indexes, commodity indexes track the performance of a basket of commodities. This basket usually includes wheat, corn, soybeans, coffee, sugar, cocoa, cotton, lean hog, live cattle, feeder cattle, heating oil, gas oil, unleaded gas, crude oil, natural gas, aluminum, copper, lead, nickel. Zinc, gold, silver etc So you can see, these indexes track a variety of commodities.The most popular commodity index is the Goldman Sachs Commodity Index (GSCI). GSCI tracks the performance of 24 [...] Continue Reading…
Commodity ETFs: How to Profit from Lower Risk ExposureA common mistake made by many investors is to allow themselves to become intimidated by the world of commodities. Yes, it is true that investing in commodities can be risky, probably more so than stocks and definitely more so than buying bonds or mutual funds, but that doesn’t mean commodities should be ignored altogether when constructing your portfolios. If nothing else, commodities are a great way to hedge your portfolio against the vagaries of inflation. After all, the major commodities, such as crude oil and gold are denominated in US dollars. Meaning that when their prices rise, the purchasing power of dollars is weakened.Fortunately there’s a way for astute investors to [...] Continue Reading…
February 26 2010 by
Keith Tufte in
commodity |
Commodities are an interesting asset class right now for a number of reasons. Commodity investing is a good way to play both offense (global economic recovery) and defense (a hedge for your portfolio against rising future inflation and a falling dollar). They are also a great portfolio diversifier which can reduce the overall risk (volatility) of your portfolio.Playing Offense: The global economic rebound is coming, and commodities will benefit. Most of the economies in the world are currently in severe recessions or have significantly lower economic growth than 2 years ago. There are now many signs that the US economy and many other economies have bottomed out and are starting to show signs of life again. US [...] Continue Reading…
February 21 2010 by
Stephen Bigalow in
commodity |
One of the most important decisions that an investor will make does not include purchasing an option or future; this decision is choosing a commodity broker. Understanding the dynamics involved in choosing a commodity broker is as much about understanding yourself as it is getting to know the commodity broker. Since commodity trading can be more involved than trading stocks, it is more important to select the right commodity broker than it is to select the right stock broker.About Commodity Futures and Commodity BrokersBy definition, a commodity market is the location where sellers and buyers are about to conduct business in futures trading. A commodities trading contract is a legally binding agreement that defines an asset, the quantity of [...] Continue Reading…
January 11 2010 by
Andrew Abraham in
commodity |
One of the biggest differences in trading is that many successful commodity trading advisors use trend following mechanical systems. Of course there are other commodity trading advisors that use pattern recognition …counter trend as well as basic fundamental analysis to base their decisions. However in my opinion, when a commodity futures trader uses a mechanical trend following system they put themselves in a position to capture rare large moves. The success of commodity trading comes from capturing these rare large moves with proper risk management. This is the key to compound money over long periods of time.Trend Following trading advisors over the years have programmed their ideas into mechanical systems that detail trade potentials (entry and exit) as well [...] Continue Reading…
January 8 2010 by
William Davies in
commodity |
Across the world commodity trading activity takes place on a range of modern, regulated commodity exchanges. A wide range of commodities will be traded between end user buyers and producer sellers under the umbrella of standard contract rules and commodity trading regulations.In effect world commodity exchanges facilitate the buying and selling of raw commodities ranging from crude oil, copper and wheat to platinum and orange juice.Some commodities such as crude oil and coffee futures have been traded for a considerable long time in mature markets, but now in the early years of the 21st century we are seeing new markets and futures contracts being introduced.These more exotic commodity classes include carbon in the form of emission permits. With the [...] Continue Reading…
If there is a handier trading tool than the Commodity Channel Index I would be hard pressed to identify it. Many day traders have flocked to using this indicator for it’s sheer versatility, if nothing else, and it’s following grows yearly.The Commodity Channel Index (CCI) was introduced in 1980 by Donald Lambert as a way to chart cyclical turns in commodity prices. I don’t trade commodities, so you are probably wondering why I would take an indicator and plug it into trading something like the financial indexes. I wish I could claim to be the first one to do so, but that is far from the case. Scores of day traders use the CCI to trade a variety of [...] Continue Reading…
January 5 2010 by
Craig Thornburrow in
commodity |
One of the best decisions that you can make when expanding your investment portfolio is to put thought into commodity trading. Commodity trading is capable of providing asset allocation that is truly ideal, and is also capable of giving you a bit of an extra hedge against inflation because you are buying into something that has a great amount of global demand. Commodity trading is not one of the investment vehicles that people consider right away, so there is a decent amount of nervousness and apprehension associated with when to invest, where to invest and how to invest. While commodity trading is known for providing rather volatile price fluctuations, the high returns are well worth the effort and the [...] Continue Reading…
January 2 2010 by
Steven T. Ng in
commodity |
What are Commodities?Commodities are goods that are in broad demand and are pretty constant and do not differ much in terms of quality. For example, gold is gold whether it’s mined in Africa or Australia.Because of this standard in quality, these goods become useful tools for investment and trading. When you buy a barrel of crude oil for example, you know what you’re getting and you won’t get short-changed or cheated.Examples of goods and products that can be traded as commodities include:* Precious metals such as gold, silver and copper. * Agricultural products such as rubber, corn, rice and sugar. * Energy and industrial resources such as crude oil, coal and aluminum. * Non-traditional “resources”. Entrepreneurial people have started [...] Continue Reading…