Commodities Demystified

Commodities Demystified takes you straight to the heart of the subject, beginning with a discussion on the basic elements of the commodities market. It then introduces you to the various available commodities and investment options, including exchange-traded instruments, futures, and options, and explains the correlation between inflation and commodity prices. Finally, each chapter ends with a quick-review quiz enabling you to test your knowledge. Designed to provide a thorough education without overwhelming you with complexities and mystifying jargon, this self-teaching guide is exactly what you need to successfully identify and trade commodities in today’s market.

Introduction:

Over the last several years investors have witnessed skyrocketing demand and rising prices for many commodities. Inspired by the moneymaking opportunities, individual and institutional investors are taking a closer look at commodities and making their first investments or increasing their commodity allocations. However, commodities are not a new asset class, nor are they a hot now, gone tomorrow investment. Unlike stocks, bonds, and mutual funds, commodities are a part of people’s everyday lives and essential for their survival. Commodities are real and tangible assets that represent the food we eat, the fuel we use to power our automobiles, the metal we utilize to make jewelry, and the lumber we use to build our homes. Without commodities, our civilization would not exist today. The same cannot be said for stocks and bonds.

Commodities are not the final end products that consumers purchase. Rice, corn, wheat, and oats are used to produce cereal. However, cereal is the end product, not the rice and corn themselves. The same logic should be applied to your investments. Commodities should not be viewed as a final stand-alone investment. Rather, commodities should be purchased to optimize your portfolio. Oatmeal cannot be produced without oats, and an optimal portfolio cannot be built without commodities. By investing in commodities, you will gain a hedge against inflation and loss of purchasing power, stronger performance potential, and a lower risk of unfavorable correlations with traditional stock and bond investments. Commodities underscore many essential products, including your investment portfolio.

Commodities Demystified is written to arm you with the information and tools you need to invest successfully in commodities. Emphasis is placed on how to include commodities in your existing investment portfolio rather than investing exclusively in commodities. Perhaps you are not interested in investing in commodities but want to gain knowledge of commodities out of curiosity or for your job. This book will deliver exactly what you need to know in those cases as well. Finally, this book is aimed at readers who have little knowledge of commodities but have the intellect and appetite for a solid grounding in the fundamentals of commodities. Accordingly, my guiding principle was not to insult any reader’s intelligence but instead to build on it.

Contents:

• Getting Started in Commodities: Understanding the Essentials
• Attractions and Merits: Making the Case for Commodities
• All About the Risks: Commodities Challenges and Concerns
• Players and Participants: The Who’s Who of All Things Commodities
• Investing Fundamentals: Risk, Return, and Commodity Considerations
• Market Indicators: Understanding What Moves Commodities Prices
• Commodity Indexes: A Look Inside the Broad-Based Metrics
• Precious and Industrial Metals: Strengthening Your Portfolio to Make It Shine
• Energy Fuels: A Powerful Approach to Energizing Your Portfolio
• Livestock and Agriculture: MOOving and Growing Your Portfolio
• Exotics and Financials: Unordinary Commodities for Portfolio Profi ts
• Mutual Funds: Using a Conventional Approach to Invest in Commodities
• Exchange-Traded Instruments: The ABCs of ETFs, ETNs, and CEFs
• Stocks and Partnerships: Taking an Ownership Stake in Commodities Companies
• Commodity Hedge Funds: An Alternative Approach for the Accredited Investor
• Futures and Options: About Managed Futures Funds and Self-Directed Participation
• Peak Performance Investing: Inside Optimal Commodity Portfolios
• Key Attributes of Commodities: Highlighting the Top 10 Defi ning Characteristics
• 9-P Performance Plan: Selecting the Right Commodities Money Manager
• Electronic Commodity Trading: An Introduction to Online Opportunities

Commodities Demystified By Scott Frush pdf