Don't kick yourself. Despite going undefeated with precious metals trades in 2010 for ETF Profit Report subscribers, now that I have the benefit of hindsight, I wish we had loaded up the portfolio with commodities ETFs and ETNs and let it ride. Ah yes, hindsight isn't too valuable in this situation, but foresight is and that's why I want to guide you through some compelling commodities ideas for 2011.
Better yet, I want to go off the beaten (kind of) and look at opportunities beyond gold, silver and oil. If those are the only commodities ETFs your broker is telling you about, fire him right now. Gold and oil aren't for everyone, but I assure you there's a commodities exchange traded product for every type of investor.
For the investor that needs a fix...
Try coffee and by coffee I mean the iPath DJ-UBS Coffee TR Sub-Index ETN (NYSE: JO). This is not a buy pick for all investors. Coffee is extremely volatile and JO is thinly traded, only enhancing the volatility. That said, 400 million cups of coffee are consumed each day in the U.S, according to Coffee-Statistics.com, and consumption is growing in the emerging markets (of course). Think investing in Starbucks beats JO? Think again.
One of the "other" white metals
You've probably heard a little something about palladium and platinum over the past year as both have delivered pretty nice returns for investors, though one has outperformed the other. Palladium will probably be the better performer of this pair in 2010 and there chart below illustrates why. Fortunately, investors have several options when it comes to ETFs that offer exposure to physical palladium.
Down on the farm
I really love some of the ETNs out there that track agricultural commodities, but I wouldn't recommend these thinly traded, ultra-volatile funds to every investor. Investors of all stripes can feel comfortable with stock-based ETFs that offer exposure to the farm.
Knowing the world needs to eat isn't enough. If that was relevant investment advice, we could all buy Kraft stock and just wait for it to go up. The better bet on increased food consumption isn't companies whose products you see at the grocery store, it's the companies whose stuff you see on the farm. Either in the soil (crop nutrients and fertilizer producers) or moving around on top of the soil (farm equipment makers). This is another genre with several options.
Don't let the next commodities bull market pass you by!
There can be some really nasty surprises in store for you when you buy and sell ETFs.
Remember, although ETFs combine the best of both worlds of stocks and mutual funds – they can act totally different from each in real life.
Those differences are usually spelled out in the "fine print" of the ETF's prospectus.
Fun reading? Not hardly.
To get more details on the ETF service recently voted "The Most Accurate in America", tap on the link below...
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