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Commodities Rising

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Commodities Rising

The Reality Behind the Hype and How to Really Profit in the Commodities Market

Wiley,

15 min read
10 take-aways
Audio & text

What's inside?

Forget the hot air about the global commodity shortage. Before you invest, look at the facts.

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Editorial Rating

8

Qualities

  • Applicable

Recommendation

Commodities markets are awash in misinformation and disinformation. Huge price swings can inflict painful losses. Should you flee to the investment standards of stocks and bonds? That might be your first instinct, but it could deprive you of strong returns, says commodities expert Jeffrey M. Christian in this smart, compelling study. He offers no get-rich-quick secrets. Instead, he emphasizes the importance of sound analysis and solid decision-making. Christian nicely cuts through the hype to give a clear-eyed view of China’s effect on commodities prices. His writing is a bit stiff at times, and but he avoids too much jargon and moves at a good pace in this informative introduction to a complex field. getAbstract recommends it to investors seeking savvy insights and for their portfolios.

Summary

Speculator Beware

Commodities are in the midst of a bull run, and rising prices for oil, gold and other staples have given these markets new respectability. In recent years, investors have heard over and over that China and India are growing so quickly that the demand for once-plentiful commodities is soaring. As a result, the thinking goes, commodities, such as oil, steel and copper, are becoming scarce, and their prices are headed straight to the moon. Since 2003, investors have bought into this philosophy in droves. They’ve bet billions that commodity prices will continue to rise. This big bet has turned into a self-fulfilling prophecy. Prices have shot up since 2003, seemingly proving the theory of a worldwide shortage of basic items. In truth, prices are rising because the commodities market is in a speculative bubble. Prices are soaring primarily because investors are chasing returns, not because of some fundamental shortage in the supply of materials.

That’s not to say you should avoid commodities altogether. To the contrary, opportunities aplenty exist in the commodities markets. Just be savvy in your approach. Commodities have been out of favor for decades...

About the Author

Commodities expert Jeffrey M. Christian is managing director of a consulting and research firm he founded in 1986. He’s a veteran of the commodities trading division at a major New York brokerage.

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