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Home >> Stock Forums >> Commodity ETFs - anyone buying

Commodity ETFs - anyone buying

ratAphooey said: "I am examining the idea of a commodity ETF right now because I believe commodity prices are bound to continue to rise and I dont really want to be a futures trader. Anyone buy one of these funds yet?"

prohobo said: "We have a basket of them, along with some futures holdings. BIK, DBA, DBO, DBS, DGL, GLD, JJC, PGJ, SH, USO, XLB Along with curriencies FXE, FXB, FXE, FXY It's just an basket mix. I can't say that one is better than the other, but they have all performed well since Jan. Most of them have listed options as wel."

AlfredSokol said: "Commodity ETFs stand to get much more popular in the next few years. Whether that's good or bad for investments is debatable. But I really do fear rising food prices. As an investor you wonder how long people can stomach the increases so to speak."

Kloewer said: "With coal and natural gas buoying my portfolio this year, I'm benefiting from the current commodities boom. But I still can't help but think this is a bubble situation, so I personally wouldn't start dumping new money into commodity plays."

AlfredSokol said: "[QUOTE=Kloewer;70419]With coal and natural gas buoying my portfolio this year, I'm benefiting from the current commodities boom. But I still can't help but think this is a bubble situation, so I personally wouldn't start dumping new money into commodity plays.[/QUOTE] Coal and natural gas are pretty safe from alternatives now so I could see them going up more. I think corn is very likely to continue to rise too. Oil is a bit scarier."

rmani said: "what are some good commodity etfs to look buy right now?"

Roger said: "ratAphooey wrote: [QUOTE]I am examining the idea of a commodity ETF right now because I believe commodity prices are bound to continue to rise and I dont really want to be a futures trader. Anyone buy one of these funds yet?[/QUOTE] Commodities already increased a lot. I dont dare to say whether they increase further. The turn often occurs on a moment you dont expect. You can of course make a judgment on the basis of fundamentals, to decide what commodities. My advice is to stay well diversified. My idea is that it is very hard (too hard) to exactly predict when exactly commodities start to increase/decrease. I am a big supporter of (over)diversification). With this strategy you neutralise systematic risks. You should profit by your ability to identify the better stocks. Good research and development of good stock picking models. In this way you should try to get that positive alpha. Of course you can make decisions because you think some industries (in this case commodities) will perform better. However in my view this is less effective than to develop good stock picking methods. If the industry goes the other direction you will go down with it. Also remember that promising industries will be priced higher (efficient market hypothesis). Also i think this approach is less scientific than the previous described method. some people argue that you can gain more with investing in some specific promising industry. However i think this method approaches gambling. When you gain you gain a lot and vice versa. Good diversification with using stock picking models is a more scientific method and better in the long run. What i actually want to say (to stay to the topic of this line) is that you should not be too enthusiastic. The market can turn suddenly and strong (see for example the chinese stocks for the last half year). I think commodities are becoming a kind of hype, and many investors invest in it. I think it is good to have positions in it, but stay diversified."