The bull market in commodities is now more than a decade old and, in spite of fears of a slowdown in China and India, the big picture tells us that this bull still has a long way to ride.
More than seven billion people now populate the planet today and by 2025 there will be eight billion. The unstoppable population boom and the ever-increasing number of mouths to feed and bodies to house is just one reason for the continuing commodities bull market. If investors arent following these essential goods, they should be.
We can barely switch on a business news channel or pick up a newspaper these days without being confronted with a fall or rise in the price of commodities, such as crude oil, gold, wheat, coffee and others.
Now a new book, How to Make Money with Commodities, written by Wall Street trading veteran Andy Hecht with respected U.K. business journalist and writer Mark S. Smith, provides investors with a practical education in these essential global goods. Guy Adami, one of the original Fast Money Five on CNBC, has written the foreword for the book.
Commodities Have Never Been More Relevant
Influential hedge fund managers, such as John Paulson and George Soros, have made no secret of their investments in gold, and the spotlight on crude oil prices has never been brighter given the changing dynamics in the Middle East. Legendary investor Jim Rogers is still riding the commodities bull.
For the savvy and knowledgeable investor, opportunities abound in commodity futures, commodity-based equities, as well as specialized funds, or ETFs, which track the movement of specific commodities.
Stocks and bonds have become hypersensitive to price movements in the commodity markets, particularly in the wake of the global financial crisis in 2008. And given the current levels of sovereign debt in the U.S. and Europe, commodities have never been more relevant.
Commodities are raw materials with which manufacturers must work. Commodity markets determine the prices of these key ingredients. For producers, the price of gasoline or diesel determines the cost of transporting their goods to markets. Together, it determines the cost of goods to the consumer.
It doesnt matter whether you hold shares in bread manufacturer Sarah Lee, car-makers Ford, Chrysler or GM or McDonalds. The price of commodities impacts company earnings, and ultimately the share price of almost every company in almost every investors portfolio.
Commodity prices also impact fixed income instruments. Sudden volatility in precious metal or oil prices will send signals to the bond market. Higher commodity prices can signal impending inflation, which erodes the value of fixed income investments.
How to Make Money with Commodities explains commodity price structure and the importance of the structure of a market when analyzing all potential investments. It also provides a comprehensive analysis of the sector, covering energy, precious metals, base metals, agricultural commodities and other commodities.
This guide to understanding and trading commodities will give the reader the opportunity to dip a toe directly in the commodity markets and will keep investors one step ahead of the pack. It is a comprehensive and easy-to-read book that also teaches investors how to save and make money in a myriad of exciting, multi-dimensional markets.