| When asked about what type of commodity | | | | just playing with some spare change they don't |
| investment a person should make, it's of course | | | | care if they lose or not. |
| impossible to answer that question without | | | | This happens because speculators gamble in the |
| knowing a lot about the risk factor willing to be | | | | market and push prices to huge swings over the |
| born by the investor, the specific goal of their | | | | short term, as well as some market forces do |
| investing, the time horizon they're willing to | | | | the same thing as prices respond to unforeseen |
| endure, and how much they know about the | | | | events. But the great thing about commodities is |
| sector they're looking at. | | | | they're based on supply and demand over the |
| If someone is using a commodity broker to do | | | | long term, and that supply and demand is not |
| their trades and make decisions on their behalf, it's | | | | terribly difficult to foresee, especially demand. |
| still necessary, in my opinion, for an investor to at | | | | Supply is the more volatile factor because so |
| least have a general knowledge of the sector | | | | many things can happen producers have no |
| they're being guided toward. | | | | control over; like diseases destroying crops, water |
| So those are things we all need to take into | | | | problems, and even electrical grid problems in |
| consideration and weigh against ourselves to | | | | countries like South Africa, where mining |
| determine the strategy we want to employ to | | | | operations have to be cut back because of lack |
| use commodities to build wealth. There's no doubt | | | | of electricity. |
| commodities in general are going to outperform | | | | Anyway, the type of commodity investment you |
| most, if not all, investment sectors going forward. | | | | make must be one you know something about |
| Not all individual commodities will do that well, but | | | | the demand for, or you could invest in an index |
| the overall sector will. | | | | that tracks a certain sector like agricultural |
| I wouldn't think of investing in commodities if I | | | | commodities, which are sure to go up over the |
| wasn't looking at the long term, as in the short | | | | next decade or two. That's safer than trying to |
| term they're one of the more volatile investment | | | | run one individual commodity, unless you really |
| sectors to engage in. Try to do the market timing | | | | have a solid grasp of the factors involved in the |
| thing and you'll get slaughtered. None of the great | | | | supply and demand equation. |
| commodity investors get into that, unless they're | | | | |