What's the best way to invest in commodities?

[debaron]

Hie guys,

What's the best way to invest in commodities other than through company shares and warrants?
Any brokers that i need to go through for this?

Cheers
Deb

 

[Seneca60BC]

Hi Deb

You may invest in commodities via Interactive Brokers (IB)

See this link:

http://www.interactivebrokers.com/en/general/education/highlights.php?p=p


and go down to commodities.

Cheers!

 

[MRC & Co]

ETFs in the US are probably best (similar to shares but you are buying a share in a commodity instead of a company). Unless you are rich, investing in commodity futures is probably a bit too much.

Mostly, you will need a broker in this market, as said above, IB satisfies this requirement.

 

[rowie]

MRC, investing in ETF's requires one to invest in the american market, hence buying in USD. If USD and commodities have a negative corelation, then wont the losses from decreasing USD cancel out the gains from increase in commodity prices? This is a point that I am trying to work out and just cant seem to justify in buying into ETF's or any commodities in USD for that matter. If as what many are predicting, a hyper inflation situation takes place whereby USD falls hugely, then any amount bought in USD now (which is relatively strong) will be wiped out hugely. Can the gains in commodity prices off-set this enough. Your thoughts are appreciated.

 

[Temjin]

MRC, investing in ETF's requires one to invest in the american market, hence buying in USD. If USD and commodities have a negative corelation, then wont the losses from decreasing USD cancel out the gains from increase in commodity prices? This is a point that I am trying to work out and just cant seem to justify in buying into ETF's or any commodities in USD for that matter. If as what many are predicting, a hyper inflation situation takes place whereby USD falls hugely, then any amount bought in USD now (which is relatively strong) will be wiped out hugely. Can the gains in commodity prices off-set this enough. Your thoughts are appreciated.

I thought I already replied to your question in the following thread.

https://www.aussiestockforums.com/forums/showpost.php?p=358493&postcount=7

You hedge against it by borrowing USD to buy the USD dominated shares. When the values of USD drops, it will cost "less" in your base currency (AUD) to repay the "debt".

 

[rowie]

Thanks for the info Temjin, will look into what you have suggested.

 

[Reealjrd]

The best way to invest in commodities is to go for intra-active broker. Invest less in commodities. Don't put too much of money in it because commodity market requires lots of margin to trade. Means if you want to trade any lot of gold you will have to pay the said margin of it. So this commodity market is better for people have huge amount of money as here you have to pay according to lots. And trading in 1 lot does not satisfy the person trading.