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Ways to gain exposure to commodities?

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VSntchr

VSntchr

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Hey all,
Im relatively new to this forum so I hope this is the right section to make this thread.

I'm interested in gaining exposure to a few commodities (oil, tin, rice to name a few).

In this case, I am looking to avoid investing in listed companies as I would like to remove business risk. As such, I am looking for some direct exposure.

I am considering investing no more than $5k in each investment.

What would be the best way to gain exposure? ETF's (tracking error), Futures (is there a minimum investment)...

Thanks for the help!
 
The only way I have seen so far is via CFDs (contracts for difference). CMC markets has a big list of commodities for which you can buy these CFDs. I understand that some people do not like these though for various reasons, so DYOR.
 
When looking at exposure to commodities through CFD's you need to look at what position you will take (long/short).

I havn't looked at the contracts recently(CFD) but i believe gold/silver contracts are around $4250(margin) with CMC.

I think if your looking at this sort of strategy you might want to talk to TremblingHand, hes the "futures guy" i like to call. He should deffinetly be able to offer you some good advise on this.

I personally would be careful with Oil as its sorta a deflation/inflation bet and could go either way whereas things like rice should perform quite well in both deflation and inflationary environments.
 
VSntchr said:
Hey all,
Im relatively new to this forum so I hope this is the right section to make this thread.

I'm interested in gaining exposure to a few commodities (oil, tin, rice to name a few).

In this case, I am looking to avoid investing in listed companies as I would like to remove business risk. As such, I am looking for some direct exposure.

I am considering investing no more than $5k in each investment.

What would be the best way to gain exposure? ETF's (tracking error), Futures (is there a minimum investment)...

Thanks for the help!
Click to expand...

I hold a little in this Agriculture Index. For a straight forward basket approach.

http://finance.yahoo.com/echarts?s=...=on;ohlcvalues=0;logscale=on;source=undefined

There are plenty of Ag ETF's, Indexes, ETNs etc.. out there.

However, DYOR.

This is not investment advice and I suggest you read a heck of a lot before getting any commodity exposure into your portfolio.
 
TulipFX said:
Hi Valuesnatcher,

Try Commodity Warrants Australia. They might provide what you are after.

http://www.cwa.net.au/index.php?option=com_content&view=article&id=47&Itemid=123

That is their commodity warrant page.

Although I know of people who have used them, I personally have not. As always do you homework.
Click to expand...

I personally wouldn't go anywhere near CWA. I have used them before and they put a massive premium on their products. Your better off learning about the commodities you want to trade on and then use IB and trade direct (through an account of your own). Save some $$$ and make more $$$ for yourself.
 
noticed you haven't mentioned gold or silver in your "to name a few" section...
bullion is one of the safest ways to gain exposure to precious metals commodity group, with recent corrections in gold and silver overnight, not a bad time to get in~!

have a look at the trend in gold/silver prices and especially the gold silver ratio falling from 65 to 46 the last year and a bit...


disclaimer: please DYOR before investing in bullion.
 
qe2infinity said:
noticed you haven't mentioned gold or silver in your "to name a few" section...
bullion is one of the safest ways to gain exposure to precious metals commodity group, with recent corrections in gold and silver overnight, not a bad time to get in~!

have a look at the trend in gold/silver prices and especially the gold silver ratio falling from 65 to 46 the last year and a bit...


disclaimer: please DYOR before investing in bullion.
Click to expand...

Point of the thread was moreso related to the best method of obtaining exposure to commodities (long term - value type investing), rather than which to be exposed to.
 
VSntchr said:
Point of the thread was moreso related to the best method of obtaining exposure to commodities (long term - value type investing), rather than which to be exposed to.
Click to expand...
I suppose you could always build a large shed, and fill it with non-perishable commodities :).
 
Re: Ways to gain exposure to commodities? Elite Traders

"Exposure" is a brilliant description.

If you'd like to dispose of your wealth in the shortest possible time, try Elite Traders. It will only cost you around $6K for their invaluable advice ("general recommendation only") and they will organize your wealth to dissipate at the rate of > $50K p.a. (at least based upon their last six month's failure rate of >90%). It's owned and organized by a very glib hurry scurry merchant named Andrew (ex Pom broker) who rounds up the victims and the Futures and Commodities spiel is spelunked well by a radio voice who runs the "base-camp" seminars and twice weekly online webinars for its gullible members. He (STEVEN) has a great line of concluding his spruiking build-ups by saying: "well that's a trade that I'll be in then". "It's a great story and it's backed by the fundamentals." "I'll get "THE BOYS" (HIS FUTURES AND Commodities team at Elite) to organize that for you" (his gullible audience). And so you're off into sugar, corn, live cattle, soy, wheat, oil, gold, cotton, CFD's, euro-bonds, Fx etc etc. The trade recommendations come at you by SMS and email at the rate of 3 to 5 a week..... and they fail at about the same rate.

After impoverishing the current crop of victims, of course Elite needs to continuously replenish their goon-ranks, so they have Andrew and a team of salesmen engaged in an ongoing program to suck more people in to their membership.... as the older and wiser (and now much poorer) members cease to be able to "trade". The members are never allowed to "know" each other's identities - as they might become "troublesome" and organize - or protest their huge losses.

Strangely enough, it's always the single isolated spike from a candle that takes you out of a trade and is bemoaned plausibly and glibly at the next morning's webinar as an unforeseen event that shouldn't have happened - but unfortunately was due to... (insert here the abstract but incredulous technical explanation as to why this bolt from the blue struck one's trade down causing total loss). In fact all it takes is an opportunist sale/purchase at below market price by their cooperating and account-holding Bank in Denmark to make the market-makers and their broker stooges happy as Larry. One spike and it's a done deal. They operate through Halifax as intermediary and account holders (not the bank, the brokers).

That they can continue to fail legally is beyond doubt. That they operate in your best interests isn't. But positivity is the name of their game. Their aim is to sell you on a trade and then to later explain away why it came unstuck, stopped you out and lost you your dough. But there's always another great story and another great trade just around the corner.

Stay clear. You've been warned. Paying $6K to be a loser? Nobody needs that burden.
 
Of course unless you believe that the floods in Australia will have a minimal impact.

I'll revisit this thread in 6 months ;)
 
I agree that agriculture (or in the general case 'food production') is going to be the next boom. However, I am having difficulty finding ways to get exposure. I have examined Australian companies with exposure, and the companies in question do not inspire me.

One of my thoughts has been setting up a CFD account, however I do not personally like the 'fakeness' of CFDs. Short of scraping the money together to start a IB account, so I can get access to more agriculture companies, I don't see many options.

Anyone seen any other avenues? I liked the look of the Potash West IPO, but from what it seems no small investor will get in on this one until it is in the market.

Anything in Potash, Ag machinery, Ag tech, Rice, Wheat, etc that I may have missed that is also in Australia??
Cheers
 

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