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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Katelew who wrote (61673)	4/25/2008 1:06:42 AM
From: epicure	Respond to of 543056

I bought DBA

To: Katelew who wrote (61673)	4/25/2008 10:52:58 AM
From: JohnM	Read Replies (1) \| Respond to of 543056

While I posted something in private to you, Kate, here is a bit more in public. I began looking at commodity ETFs a bit more seriously, and as portfolio diversification, thanks to reading stuff on asset allocation, particularly David Swenson's Unconventional Success. Swenson is the hugely successful investment manager for Yale University. The book is his attempt to offer advice to small investors based on the innovative, now widely copied, ways he managed Yale's funds. And the other book I'm reading on the same topic that suggests some of the same strategies is Roger Gibson's Asset Allocation. As far as commodity investing my take to date is to pay attention to two variables: sector allocation and companies versus commodities themselves. In the first case, some of the commodity ETFs are over allocated into energy, specifically oil. If one wishes to take on that much of a sector play, it works; but if the goal is diversification within the sector, then it makes sense to find ETF/ETNs that deliberately cap the proportion in energy. Second, on the company/commodity variable, some ETF/ETNs focus on company indexes, some on commodity indexes. It's, obviously, important to know which is doing what. On that basis, I began a small starter position in DJP. finance.google.com. It's an ETN based on the Dow Jones commodity index with a cap on energy of, I believe, 30 per cent of the portfolio. But, as I said in a previous post, the long Barrons piece on commodity speculation led me to back out of the position to wait for a better moment. I'm very early at this part of investing so please take all this with more than the usual grains of salt. And reading your posts indicates you are well ahead of me. But if you are considering ETF/ETNs, you might take a look. My resources, at present, for deciding about this are a monthly Morningstar newsletter on ETF investing and Tim Middleton's ETF Insider, also a monthly newsletter on ETF investing. And the usual books. David Fry has a particularly provocative one, I forget the title, something like Creating your Own Hedge Fund with ETFs.