Futures For You by Carley Garner
WHAT IS THE BEST WAY TO INVEST IN COMMODITIES?
The commodity markets offer opportunities for traders of all sizes, strategies, and risk-aversion levels. However, before you put money to work in commodities you must be aware of two simple, but often overlooked, facts:
1. Trading is not investing. Understanding the difference between these two approaches is important because the allocation of your assets should be overweight in investments and underweight in trades.
2. Putting money to work in the commodity markets, whether as a trader or as an investor, is far different than doing so in traditional asset classes such as stocks and bonds.
Trading vs. investing
Trading is active speculation on price changes; traders might go long or short a market in anticipation of relatively short-term moves. Investors, on the other hand, are the so-called buy and holders whose purpose is to accumulate gains on a long-term basis, namely several months or even several years.