Wing&Prayer
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Wheat is up 80% in the last ten months. Copper and gold is also rising. Oil is at a record high. As demand for basic commodities increases in the B(rasil) R(ussia) I(ndia) C(hina) regions, should long term investment in these areas become a serious consideration? Equities markets, it would appear, have moved past the 'readjustment' phase into the 'notonyourlife' phase as US rate instability and uncertainty continues to show no immediate sign of recovery.
Given the general uncertainty about commodities markets - where does one start investigating investment possibilities? Is there such a thing as an Irish based broker capable of providing advice in the area?
maybe I missed something!Help!
I think that you should do some additional research into what commodity funds are available to the Irish investor and stick with that, especially as you have never invested before.
You can buy into some of these collective investment funds without initial commissions and an annual fund management charge of around 1%.
If thats too expensive then try an Exchange Traded Fund (ETF).
i have read alot about commodity investing over the last few years, i agree that it is a bull market but nothing i have read has convinced me to invest directly in commodities futures, i simply don't know enough about it. However i am invested in companies that sell commodities like oil and mining companies and have done well but nothing spectacular. At least this way you can sit out the market falls until the long term trend turns back in your favour. With futures you are paying a specific price for a commodity at some future date, i don't think this is for amatures. Wheat may be in a bull market but what if the futures markets have been over optimistic in there pricing, it still maybe a great price (if you are the producer) but you have paid too much and will make a loss on this trade. I know there are tools to roll over on contracts but it is not for the faint hearted.
Good advice.
Please do not use futures unless you are a sophisticated investor. Are'nt options safer. Hammersmith council got burn't with futures seriously in the 1990's.
In the same vain - if the price of a barrell of oil has increased from $35 to almost $80 in the last four years... why has that price increase not been experienced at the pumps??? Food for thought...
Wing&Prayer;493919 )Given the general uncertainty about commodities markets - where does one start investigating investment possibilities? Is there such a thing as an Irish based broker capable of providing advice in the area?[/quote said:Read Mark Shipmans book, The next big investment boom, he was on late late show last year, predicted slow down in housing market and predicts
boom in commodities. There is a lot of money flowing in and out of commodity markets, good long term gamble i reckon, as people move from away from property investments. I'd agree stay away from futures. Research fundamentals, for instance wheat production in eastern european countries has surged, australia down due to drought. Theres also Glanbia, closer to home, they're investing 4.5 million in asia pacific region and also 22 million in nigeria's fast growing consumer market. (milk powders)I use Computershare, very straight forward. Made my first purchase with them bought 100 shares in Tullow Oil, not doing bad. Good luck
Also food companies and agriculture companies like glanbia are more on the processing side than on the production side. Is there not a question of their margins being squeezed by increased buying costs with raw materials but also resistance from the big retailers to pass this onto the consumer.
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