Your Questions About How To Invest In Commodities

Mary asks…

They say that oil commodities are going to go up how do you invest in this like some people buy stocks?

John answers:

Not going to. They have already gone up and up and up. One way is to buy stock in an oil company, my favorite way. CVX, COP, APA, etc.

Ken asks…

Why can’t WE invest in ETF’s, Currency or Commodities in our 401k?

All of the funds available in my 401k options are down 10-30% year to date. And, how can I truly be diversified without being exposed to commodities, currencies and international opportunities? I feel Social Security is the biggest Ponzi Scheme EVER. And, to make matters worse savvy investors like myself can’t take advantage of all markets within our 401k accounts. My IRA is up over 52% this year alone by moving it from one ETF to another. I’m sure there are others who are up ten times that. We should have the opportunity to manage our own retirement funds. Imagine averaging 15% or more a year for 20 years, tax deferred. I could retire not having to worry about BIG BROTHER or MY UNCLE SAM.
I learned long time ago, the key to investing success is to cut loses early. My limit is 9% downside.

John answers:

You understand one of the major failings of 401k accounts. It actually might not be a failing, but it can at times appear so. Because of fiduciary duty of the fund sponsors they have to be somewhat circumspect in their offerings. They have to be somewhat plain vanilla. You have discovered the way around that by using an IRA. Just don’t get too frisky or you may wind up with a drop of 50% or more.

Mandy asks…

How can a small investor with little to invest get started in buying on the commodities market?

I am aware of things like Ameritrade and Sharebuilders for the small investor for stocks on the exchange. I am interested in commodities, preferably oil.

John answers:

Yes oil is a commoditie, listed under utilities and utilities is the way to go in the market . You see investing in the market is not so complex just don’t put all your eggs in the same basket ! Meaning You have to have a well diversified portfolio, meaning don’t put you money in one market or one specific commoditie . You should have your money split up in many commodities as well. Like realestate,bullion,and other funds other than the stocks and bonds . And if You use an adviser You should no that a great adviser will earn you 10 to 13% on your portfolio no mater what the Market does . That is why it is Important to DIVERSIFY ! And If You choose to go alone remember this as most investers do is to read three top investmant pappers and magazines and make your picks based on advise of the top three advisers .

Linda asks…

How do you protect your money from inflation?

With the US dollar dropping to new lows I would like to know…..How do you protect your money (US dollars) from inflation? Would it be wise to invest in foreign currencies or commodities?

If so please explain why.

John answers:

Stocks, especially oil stocks. Oil stocks have proven to be a better hedge against inflation than gold or gold stocks.

Robert asks…

How do I invest in Algae Biofuel? Is it in stocks or commodity?

I want to invest in Algae Biofuel but I don’t know how I can do so. Many of the companies are private companies that don’t have stock symbols. Do I just invest in big companies that invest in Algae like Chevron or Exxon? Or is a commodity I can buy?

John answers:

You could go to http://www.sec.gov navigate to the Edgar search, do a word search for the term “Algae Biofuel” to find public filings where that term is used and narrow your search from there. I am not aware of an Alage Biofuel commodities contract.

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