Commodities and equities started off the week in a hole as resurfacing Euro zone debt woes propelled the U.S. dollar in the currency markets. Gold is off to a choppy start as well; the precious metal has climbed higher on falling volume over the past three sessions, perhaps suggesting that traders are holding back ahead of Ben Bernanke’s testimony on Thursday. Today, the spotlight shifts onto the global energy bellwether, Exxon Mobil, and its 2011 year-end results [see also Iran Tensions And Crude Oil].
With almost an entire month in the books, 2012 is shaping up to be a strong year for commodities, as a number of these investments have produced handsome gains. Futures for gold, cocoa, and silver have garnered a fair amount of attention, delivering eye popping gains in a relatively short period of time. But for those looking for a truly hot commodity, no product has been able to outdo orange juice. While these futures are certainly more obscure than something like gold or oil, their gains for the year are impossible to ignore [see also 50 Ways To Invest In Agriculture].
The agriculture sector has long been a popular place for commodity trading. After all, it was with agricultural futures that commodity trading got its start. Farmers had originally used these contracts to help offset any losses in crop yields. Now, the agricultural space has blossomed into a market chock full of options for investors, but many investors are still unaware of the vast opportunities that this sector offers [see also Invest Like Jim Rogers With These Three Agriculture Stocks]. No matter what kind of investor you are, there is certainly an agriculture/agribusiness option that fits your investment style. Below, we outline 50 ways to invest in agriculture to help investors pick the correct security for their portfolio:
After enduring a rough year, cotton may finally have its groove back. The commodity soared to historical highs in 2010 with prices breaking records on what seemed like a daily basis, but as 2011 rolled around, futures came crashing back to earth, effectively erasing most of the gains that had been amassed in the previous year. But now that 2012 is well underway, cotton may be poised for another big year, as its futures have been some of the best performing thus far. Though cotton is down over 7% in the trailing 12 month period, this year alone has seen prices jump by over 8.2%, putting the fluffy commodity back on top for the time being. Similar to 2010, there are a number of factors combining to push up cotton prices, all of which need to be considered prior to investment [see also Ultimate Guide To Cotton Investing].
In 2012, market volatility is par for the course for any serious investor. The struggle for consistent growth and return on investments is one being waged in all markets across the world; however, income investors remain wary of commodities as a source for positive value. Conservative investors quick point to the prospect for volatility that exists when adding commodity stocks to their portfolios may be missing out on the growth that exists in their dividend potential. Through selective research and investing, commodity stocks are a solid approach to generating higher returns in, while simultaneously increasing the stability of, your portfolio [for more commodity news and analysis subscribe to our free newsletter].
Investor interest in commodities has surged in recent years, the result of both a prolonged rally in natural resource prices and the development of new vehicles that facilitate access to this asset class. Specifically, the launch of a robust lineup of exchange-traded products that utilize both physical commodities and commodity futures contracts has brought commodities to the masses; they’re no longer reserved for the largest and most sophisticated investors [see also Jim Rogers Says: Buy Commodities Now, Or You’ll Hate Yourself Later]. Commodities have obvious appeal to active investors looking to generate profits from short-term price movements; the volatility of this asset class is ideal for risk-tolerant individuals who actively monitor their positions. But commodities may also have appeal to the long-term, buy-and-hold crowd; this asset class has the potential to bring both diversification and return enhancement to traditional stock-and-bond portfolios.
2011 was a tough year for commodities, with the majority of investors watching their positions turn sour as equity markets wreaked havoc in the commodity space. But while finding gains for the year was a tall order, it is clear that investors are looking more and more to exchange traded products to make a play on the commodity space. Inflows to commodity ETPs surged this past year for a number of products, as these investment vehicles are quickly becoming the go-to space for exposure to this asset class [see also 12 High-Yielding Commodities For 2012].
Markets have been enjoying a rather strong week despite the mixed bag of earnings that have been announced. It seem that the winners are outshining the losers as the S&P 500 was able to top 1,300 for the first time since last year’s U.S. debt downgrade. Futures markets have been particularly active, with a number of contracts moving in both positive and negative directions. Over the past five days, orange juice futures, for example, are up over 18%, while natural gas futures have tanked by roughly 13.5%. In an effort to keep our readers more informed on today’s commodity markets, we outline three of the best commodity articles from around the web this past week [see also 12 High-Yielding Commodities For 2012].
Equity markets have been on a bullish streak all week as positive economic data on the home front coupled with encouraging developments overseas have helped to restore investors’ confidence. Positive momentum on Wall Street has translated into weakness for the U.S. dollar, helping commodities to inch higher across the board. With earnings season well underway, the spotlight shifts to mining giant Freeport McMoRan Copper & Gold and firm’s 2011 year-end results [see also 12 High Yielding Commodities For 2012].