Your Questions About How To Invest In Commodities

David asks…

how to invest in commodity trading ? is it possible to do this sittting at home?

John answers:

Yes, you could open a financial spread trading account and trade from home. That’s the easy bit. The hard bit is making some money.

You could open an account with Financial Spreads or Capital Spreads or one of the other spread trading firms.

Nearly all firms offer trading on: Gold, Silver, Brent Crude Oil, US Crude Oil and Coffee.

Most firms also offer trading on: Wheat, Cattle, Natural Gas, Platinum, Cocoa and Corn but these markets tend to be far less liquid.

Cost-wise, generally, there are no commissions or brokers fees. There is no Capital Gains Tax, no Income Tax and no Stamp Duty if you’re in the UK or Ireland.

You can trade online and/or over the phone.

A number of the companies also offer account holders access to: Free Research and Data including Technical Analysis, Candlestick Charts, Market Heat Maps, Events Calendar and Company Specific Data

All good so far.

But financial spread trading (aka spread betting), like many forms of investing, has a habit of catching people out. It’s not for everyone. Strategy, disciple and knowledge are needed.

Like the adverts say ‘Please ensure that you are fully aware of the risks involved and only bet with money you can afford to lose. Whilst we provide compulsory stop-losses, they are not guaranteed and it is possible for you to lose more than your initial stake and deposit. Please ensure spread trading meets your investment objectives and, if necessary, seek independent financial advice’

Also in the current environment the markets are highly volatile and therefore the risks are higher.

If you want to trade commodities, your best bet is to improve your trading knowledge and leave real money trading to a later date.

If you want to get the hang of how the trading works on many different markets eg oil, gold, stocks, stock market indices, forex etc you could open a free ‘demo’ trading account, again with companies like Financial Spreads or Capital Spreads.

With a demo account, you can get a better understanding of how the markets work and how easy it is to lose money when you get it wrong.

However, don’t get too confident and open a real money account after 2-3 weeks of demo trading.

Either way, the demo accounts can help improve your commodities knowledge without hurting your pocket.

Good luck.

Donna asks…

how to start trading in commodities in indian market online?

i want to invest & earn from commodities trading.please provide me the systematic investment & trading skills.
tricks for trading commodities

John answers:

Hi
first you have to open a mcx account with any brokerage house after that you can start trading in mcx through your broker for further information you can call me at my mobile number

Mary asks…

Investing in commodities?

Hi,

How do i go about investing in commodities in Singapore? I have an account with Phillips Securities but they seems to have commodity indexes rather than raw commodities such as gold, corn, wheat etc.

Cheers

John answers:

Itf’s always seem to be managed. That means a fee for services. If you have cash, you can buy silver, gold, wheat, cotton, steel, etc. And use it directly.
It’s said that money makes money; it does, but to whom? Plus, there is the person that has it to begin with. Seek your own counsel and confer with a bank official where your funds are kept. I’d get advice from there rather than on Net. Like face 2 face. Wear good clothes

Susan asks…

How Bad Will Job Layoffs Affect Stock Market?

There have been rumors and comments by different country’s officials such as Cuba and France that hundreds of thousands of government officiated jobs will be laid off. If all this comes through there will be millions without jobs. Will this trigger a mass recession? Is it time to invest in commodities, would a commodity e.t.f. also do the job in recession?

John answers:

Well you have to also consider the barriers between these economies. The half million laid off civic workers in Cuba aren’t likely to be competing for jobs in the US unless there’s a mass exodus to Miami. It’s believed that the move in Cuba is towards a more capitalistic system and the layoffs will prompt a surge in entrepreneurialism. Almost everyone works for the government in Cuba so this will be across all sectors of the economy and not just to what we would normally associate with civil service. The half million in the UK are government employees in the traditional sense so it’ll be postal workers, clerks, street maintenance etc. All the jobs that are traditionally associated with government work so there will be the barrier in that their experience may not be directly transferable to the private sector plus there’s the international borders to isolate the economies. France seems to have problems all around but that’s not unusual for France and there’s also the language barrier between them and our economies.

I think the issue is going to be public debt. With the exception of Cuba, the mass layoffs will likely burden the various social systems and the question is will this hasten the Greek banking contagion which is still spreading throughout Europe and will this affect the money supply. If it does affect the money supply in these countries then yes the sock market will be affected but in terms of effecting our economies in general, there’s a degree of compartmentalization and isolation.

In uncertain times, it’s not a matter of deciding to bail out of one position and jump into another, it’s a time for money management. Diversification. Princeton Newport partners was literally unaffected by the 1987 Black Monday turning a 34% yield for the year. They didn’t do this by speculating whether to be in commodities or stocks, they did this by prudent risk aversion and money management. Just make sure your portfolio is balanced with a good healthy slice of cash or cash equivalents and when something happens, you rebalance.

Joseph asks…

What’s the best way to invest in the Canadian dollar? Also commodities ?

I don’t have a lot to invest but I believe the dollar is just going to keep getting weaker. Many analysts I’ve read really like the Canadian dollar. Also how does a small investor go about investing in different kinds of commodities?

John answers:

The best way to invest in the Canadian dollar aka the loonie is trading in the foreign exchange market. You trade the loonie against other currencies such as the US dollar or Japanese yen. Most people aren’t familiar with the foreign exchange market since all you hear about is stocks, options, and commodities. In reality, it is the biggest financial market in the world and trades almost 24/7. You should check out BabyPips.com, http://www.babypips.com

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