Commodities v Equities split

wombat42_2

purch wrote: »

When you say 50% commodties (sic) what do you mean ??

Have you directly invested via Futures ?? ETC's ??

50% directly invested is a scarey proposition if you don't really understand what you are doing. The Volatility of the Commodity Futures market is 'eye watering' and these markets are driven by a myriad of factors, not least technicals which can make the markets move in ways that defy the fundamentals frequently. Take Gold...the fundamentals mean you can expect the price to keep rising, but technically it's quite possible the market is building a huge rising head n shoulders formation ( well I can see it anyway ) which will require a pull-back into the $700's to finish the second shoulder.....then a major bull run to $ 1500 and beyond is quite possible.

Are you able to sit tight through such a move ??

MFM iFunds ETF Commodity Fund is the least risky way of getting into commodities. It has so far never dipped more than 10% as compared to 35% dips in something like JP Morgan nat res and 10% dips in the DOW and the FTSE.

purch

MFM iFunds ETF Commodity Fund is the least risky way of getting into commodities

....the more you keep saying it the more it must be true I guess !!!:eek:

Hopefully you'll be able to convince yourself that you're right this time, and the agonising and second guessing will be over.

jon3001

mr_fishbulb wrote: »

A thing to take into account is that commodities don't pay dividends, which traditionally make up a chunk of investment returns.

Investments backed by commodity futures can pay other types of income though such as interest and roll yield.

See my other post about the components of the returns.

jon3001

wombat42 wrote: »

MFM iFunds ETF Commodity Fund is the least risky way of getting into commodities. It has so far never dipped more than 10% as compared to 35% dips in something like JP Morgan nat res and 10% dips in the DOW and the FTSE.

Its history is really a bit short to make any predictions about what kind of dips can be expected. Especially as we're in a commodity bull market. Really you need to see the performance through at least one market cycle to get an idea.

wombat42_2

purch wrote: »

....the more you keep saying it the more it must be true I guess !!!:eek:

Hopefully you'll be able to convince yourself that you're right this time, and the agonising and second guessing will be over.

http://www.ifunds-asset.com/funds/commodity-fact

wombat42_2

jon3001 wrote: »

Its history is really a bit short to make any predictions about what kind of dips can be expected. Especially as we're in a commodity bull market. Really you need to see the performance through at least one market cycle to get an idea.

In any event it certainly wont be as big a drop as the commodity producers share price.

My point is that there is no certainty that commodities will boom for the next 10 years but there is a pretty good chance they will due to plenty of empirical evidence. I dont have any more confidence in equities doing any better over that time period.

purch

Like I said....you only have to convince yourself....not anyone else

Hopefully you will manage it this time !!!!

Personally I like a little more control over which Commodity Index I am tracking at any one time.....but each to his own.

cloud_dog

wombat42 wrote: »

Commodity producers like miners you mean. I think it best to avoid commodity producers unless you only put a small percentage of your portfolio in them as they usually magnify commodity price movements and are therefore more risky than pure comodities.

Isnt this a little contradictory.........if you beleive certain commodities are going to continue to rise then surely the corresponding producer (stock) will rise, and will benefit from gearing.

Also there is a chance that a commodity price will go up but not the share price of a producer as overheads and cost of production may go up.

Yeah, its called reasearch. Example, Barrick Gold fairly sizeable Gold producer yet their SP hasn't really risen / reflected the increase in gold over the last couple of years - WHY? (answers on a postcard please)

cloud_dog

cloud_dog

meester wrote: »

You have no idea though. It's quite arrogant to assume that you know better than the market, not to mention expensive.

meester accusing someone of being arrogant - made me laugh :rotfl:

wombat42 wrote: »

The market trend is there right now, commodities booming, equities tanking.

Not my resource stocks :-)

Aegis

wombat42 wrote: »

I am not going to bore you with the details but there is plenty of empirical evidence that commodities are set to boom for the next 10 years due to massively increased demand. How can you have any confidence that equities will do any better ?

So this is your flavour of the month for February, yes?

China was your big thing for the next 10 years, then Global Equities, then BRIC, then Global Equities again, now we're on to Commodities?

Do you not think that your constant flitting about from one buzz-sector to another might be having some effect on your credibility at this point...?

For the record, I have investments in all of your recent suggested sectors and more, and I plan to keep it diversified so that I can take advantage of the good and mitigate the losses simply by diluting them..