Im looking to invest in commodities but I only have access to stocks. Are there any good stock or etfs to serve this purpose? Anyone have any good ideas? Thanks.
What are good Commodity stocks to buy?
- Thread starter jffhntr123
- Start date
Commodity stocks have performed very well recently so just be careful not to buy near a possible top. (Watch the US Dollar... it's weakness has helped commodities rise imo... because of inflationary fears.
There are plenty of commodity stocks or ETFs. You need to be more specific about what kind of commodity... oil, metals, agricultural, etc.?
Based on market cap XOM and other oil companies are the biggest. But don't forget that crude oil has gone up steadily recently... not sure if it is a low risk, high reward type trade. You could also go with energy ETFs like USO.
There are some good agricultural companies such as POT, MOS and MON.
There are ton's of ETFs in all types of commodities. Gold (GLD) is very popular. Just do a google search on commodity ETFs and you will find hundreds. I would recommend to avoid leveraged ETFs. Also avoid one's with exceptionally low volume.
Read up on Jim Rogers if you want to get more into commodities too.
There are plenty of commodity stocks or ETFs. You need to be more specific about what kind of commodity... oil, metals, agricultural, etc.?
Based on market cap XOM and other oil companies are the biggest. But don't forget that crude oil has gone up steadily recently... not sure if it is a low risk, high reward type trade. You could also go with energy ETFs like USO.
There are some good agricultural companies such as POT, MOS and MON.
There are ton's of ETFs in all types of commodities. Gold (GLD) is very popular. Just do a google search on commodity ETFs and you will find hundreds. I would recommend to avoid leveraged ETFs. Also avoid one's with exceptionally low volume.
Read up on Jim Rogers if you want to get more into commodities too.
I don't like recommending specific stocks, if i did it would be the ones i already own. That would be entirely self-serving. But you do have the right idea as we are going to have quite a bit of inflation in the next few years, and commodities are a classic hedge against inflation. Now is the right time to buy them. They have been relatively strong of late but still way down from previous highs. It is not at all too late to start acquiring them; they have a long way to go. There are many stocks of commodity producing companies to choose from. Buy the ones that pay fat dividends.
I posted a long term recommendation on BHP a month ago a few posts back of mine and its doing really well so far. RTP (Rio Tinto) is probably just as good if not better, extraordinary volatility, its doubled over the last 5 months and yet it is STILL 61% below last years dizzying heights, not bad vola. for a company that has the same market cap as McDonalds:
http://finviz.com/chart.ashx?t=RTP&ta=0&p=m&s=l
I am a big fan of Iron ore miners as I see them as a great leverage into emerging markets. VALE is the other holding I would consider (these 3 together supply 70% of the worlds iron ore).
Don't know enough about POT (as was mentioned a few posts back, interesting to hear more from those that trade it), but Soros is into it at the moment on a big scale. Likewise his interest with PBR (Bras and pot seem like best buys for him haha), with its big announcements on a steady basis re:tupi, that keep this one moving as well.
Another possibility is Peabody Coal (BTU). Bill Gates cascade is into this one in a big way, seems like a good leverage into clean coal (they are a part of FutureGen as are BHP/RTP) if the technology takes off at some point, then the upside should be sustainable.
But for me personally the one stock that I would stick to if I had to out of this bunch, is RTP. Consider them like a mini BHP, the lower market cap (65 bil versus 167 billion) perhaps means greater upside room to move. My own (rosy I know) projections are a doubling every 7 years for the forseeable future at present inflation rates, so that 2.5% dividend will kick in nice in a few years time. Lastly, consider averaging into a commodity position over time as these stocks are volatile and hence real tricky to time right, so if your pulling money out of the markets then it would be a good discipline to build up a steady long term position with your winnings on these type of stocks.
http://finviz.com/chart.ashx?t=RTP&ta=0&p=m&s=l
I am a big fan of Iron ore miners as I see them as a great leverage into emerging markets. VALE is the other holding I would consider (these 3 together supply 70% of the worlds iron ore).
Don't know enough about POT (as was mentioned a few posts back, interesting to hear more from those that trade it), but Soros is into it at the moment on a big scale. Likewise his interest with PBR (Bras and pot seem like best buys for him haha), with its big announcements on a steady basis re:tupi, that keep this one moving as well.
Another possibility is Peabody Coal (BTU). Bill Gates cascade is into this one in a big way, seems like a good leverage into clean coal (they are a part of FutureGen as are BHP/RTP) if the technology takes off at some point, then the upside should be sustainable.
But for me personally the one stock that I would stick to if I had to out of this bunch, is RTP. Consider them like a mini BHP, the lower market cap (65 bil versus 167 billion) perhaps means greater upside room to move. My own (rosy I know) projections are a doubling every 7 years for the forseeable future at present inflation rates, so that 2.5% dividend will kick in nice in a few years time. Lastly, consider averaging into a commodity position over time as these stocks are volatile and hence real tricky to time right, so if your pulling money out of the markets then it would be a good discipline to build up a steady long term position with your winnings on these type of stocks.
Quote from newguy05:
why would that be self serving? do you think somehow a retail account buying some shares will move the market on the stock?
Because I own the stocks myself i can't be entirely objective, and i could be wrong as well as right. I don't mind others recommending specific stocks, but in general i don't do it. The few times i have posted in the stocks thread have mainly been to give my reasons for interest in a stock, rather than to simply say buy or sell this or that. And in the present case i wasn't inclined to go into specifics, so i thought it best just to not mention any.
By the way, i like the recommendations in NZD... above because reasons are given and there is at least a little discussion. Nothing wrong with that.
This is not a criticism of your holdings, just offering a discussion point. The only thing with buying commodity companies are the counterparty risk. Yes it's very unlikely any of them will go under, but in this market you never know what will happen - accounting frauds, some surprise news etc...
By buying pure commodities, you sac the potential for a higher % return but gain a slight peace of mind, as the raw commodities can never go bankrupt.
Enron aside, note alcoa (aa) one of the largest. There was real fear of bankruptcy early in the year for this company, and i think it did come pretty close, the stock were certainly at the bk level at $5
By buying pure commodities, you sac the potential for a higher % return but gain a slight peace of mind, as the raw commodities can never go bankrupt.
Enron aside, note alcoa (aa) one of the largest. There was real fear of bankruptcy early in the year for this company, and i think it did come pretty close, the stock were certainly at the bk level at $5