Commodities for Dummies 2nd Edition

When I wrote the first edition of Commodities For Dummies, commodities were certainly not a mainstream asset class. However, five years later, commodities have grown into their own legitimate and respected asset class. Trade magazines and financial newsletters frequently include featurelength articles on the topic. Financial TV stations regularly report oil, gold, and copper prices on the crawling ticker. And no global macro money manager can claim continued success without constantly keeping a pulse on commodities. This situation wasn’t true at the beginning of the century, and it’s a testament to the growing importance of commodities in our globalized and globalizing world.

Why are commodities, long regarded as an inferior asset class, quickly moving to the investing mainstream? Good performance. Investors like to reward good performance, and commodities have performed well in recent years. In addition, investors can more easily access these markets: Plenty of new investment vehicles, from exchange-traded funds (ETFs) to master limited partnerships (MLPs), have been introduced to satisfy investor demand.

As commodities have been generating more interest, there’s a large demand for a product to help average investors get a grip on the market fundamentals. Commodities as an asset class have been plagued by a lot of misinformation, and it’s sometimes difficult to separate fact from fiction or outright fantasy. The aim of Commodities For Dummies is to help you figure out what commodities are all about and, more important, develop an intelligent investment strategy to profit in this market. Of course, as with every other asset class, commodities are subject to market swings and disruptions, which can be a source of risk but also an opportunity.

As the 2008 Global Financial Crisis demonstrated, even the most savvy investors with the latest up-to-date market information can struggle with unique investment events. These disruptions are part of the market process. Investors who protect themselves through a “margin of safety” philosophy will be able to protect their downside during periods of extreme volatility. Using this book, you’ll better equip yourself to avoid the pitfalls inherent in any investment activity.