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David Fry
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David Fry writes a subscription newsletter focused on technical analysis of exchange-traded funds, called ETF Digest (www.etfdigest.com). Dave founded the ETF Digest in 2001 and was among the very first to see the need for a publication that provided individual investors with information and... More
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  • Top 10 Agricultural Commodity ETFs 1 comment
    Mar 14, 2012 3:25 PM | about stocks: DPU, DJCI, GSC, UCI, USCI, GCC, RJI, GSG, DJP, DBC

    Aside from traditional non-correlation of commodity markets to conventional portfolio allocations, concerns about food prices offer strategic investment opportunities in this sector. When prices of foodstuffs are rising, it makes sense to be able to profit or even hedge against these events. This logic naturally would include other commodity ETF / ETN products directed toward metals, energies and currencies.

    That said, these targeted agricultural markets aren't for everyone. Some on our listing are perhaps too targeted and take unique skills to understand how they may be utilized. Grains are influenced by weather, seasonality, currency, disease and many other factors. Meats may trade counter-intuitively given weather and disease as farmers drive herds to markets at odd times. Cotton is affected by similar conditions and the health of the overall economy. So-called "softs" including coffee, sugar and cocoa also have their unique circumstances including regional issues.

    As a former CTA (Commodity Trading Advisor) and CPO (Commodity Pool Operator) I know the value of having an allocation of most portfolios to the commodity sector. These provide increased diversification opportunities for any portfolio. After nearly 40 years of seeing these positive effects during a variety of market conditions, I know first-hand their benefits.

    Four other risk factors should be considered:

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  • universaltradingtips.com
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    Comments (3) | Send Message
    What about the trident commodity trading system that uses price movement to signal entry exit targets based on regression and fibonnaci numbers? I haven’t found a great definition and/or example of it yet.
    26 Jul 2012, 03:44 PM Reply Like
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