punk_ash

Commodity Index Funds: The Good, The Bad and The Ugly

We live in a bizzaro world. All pundits are screaming about commodities. The financial firms have flooded the markets with commodity ETF and ETN. No one will tell you that most markets are in general in contango, especially energy due to storage issues. That means a continuous bleeding of your portfolio as you are paying someone to store oil and gas.

If the spot price stays flat or about flat, that ETF will start going to a BIG 0. Check out the performance of OIL, UNG, USO.

Investing in these is in itself a full time JOB. A long term investor is better off spending on education, pay off the house, not borrowing money@25% from credit cards. If you are old, buy annuities.

I think investing in the commodity companies is much better, they just might give you a dividend rather than charge the contango fee.

Yes, I have invested in commodity ETFs and made some lost some, but I will STAY the HECK away from commodities.