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Strategies & Market Trends : Commodities - The Coming Bull Market

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To: maceng2 who wrote (461)7/6/2001 8:53:39 PM
From: craig crawford  Read Replies (4) of 1643
 
>> So commodities are somewhere where you can really lose some serious money <<

yes, if you don't know what you're doing, but investors have seen over the last year that you can lose a lot of money in the stock market too! to the tune of $3.4 trillion just in the the first quarter of this year alone.

>> Options are not so bad <<

options aren't risky? options can be quite risky. of course there are strategies you can employ to lessen your risk with options. you can do the same with commodities, choosing the level of risk that is appropriate for you.

>> What kind of money do I have to put up front to get involved in the commodities biz? <<

that depends on how you want to approach commodities. if you want to buy futures on the actual commodities, or equity stakes in companies that benefit from rising commodity prices. options on futures sound like the best bet for you. just like with stocks, your risk is pre-defined entering the trade. you know exactly how much you can lose ahead of time and you don't need a lot of up-front capital.

i think you could take $250/month and purchase shares in certain companies that will do quite well if you hold them for 5-10 years. if you prefer more diversification, i posted an article a week or so ago on this thread which showed an oppenheimer real asset fund where the stated goal is to mirror the goldman sachs commodity index. that would be a diversified non leveraged way to make an investment in a broad basket of commodities.
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