June 16, 2008 at 6:00 am by Tom Lydon
As a consumer, the commodities boom can make you feel pinched, but the bull market of raw materials could be an investment opportunity with exchange traded funds (ETFs).
So why and how do you incorporate commodities into your portfolio? Brian O’Keefe for Forbes reports that adding commodities to your portfolio mix is a way to offset inflation. A growing number of planners and advisors are putting 5-10% of a portfolio into commodities. It’s a new wave and it’s not overly aggressive to propose a 10% allocation at this point. It’s very easy to build a well-rounded portfolio with two or three ETFs.
Some ETFs for a foundation are:
- PowerShares DB Commodity Index Tracking Fund (DBC)
- S&P GSCI Commodity Index (GSG)
- iPath Dow Jones AIG Commodity Index Total Return (DJP)
Tags | Agriculture, Energy, Oil
June 16th, 2008 at 7:01 am
I would also recommend that, for those of us who think that the price of oil will eventually decline and thus commods with it, you can short the commods market with the new DB ETFs:
http://seekingalpha.com/article/74639-deutsche-bank-to-launch-leveraged-inverse-commodities-etns
* The DB Commodity Double Short ETN (NYSE: DEE)
* The DB Commodity Double Long ETN (NYSE: DYY)
* The DB Commodity Short ETN (NYSE: DDP)
* The DB Commodity Long ETN (NYSE: DPU)
Cheers!