Commodity Trading – the Next Profit Center?

By Dorotee Joe

With the rapidly sinking U.S. dollar against other currencies, investors can read the trends of history and students are looking for ways to grow their capital. Housing and esoteric products debt broken as the bursting of the stock market bubble in 2000, and the normal economic cycle in May turned into a repetition cycle of bubbles, with strong inflationary pressures. As always, the investment process is one of Paris careful research on things â? the sale of goods when they have appreciated in value and buying those that you think will pass the time. With the weak dollar and the risk of a recession, coupled with the Fed cut the prime rate of banks as part of a rescue plan for staged crisis mess mortgages, lines of business tend to make interesting products. Commodities trading is simply the purchase of products (such as gold, silver or platinum) as a tangible asset. When inflationary pressures are strong (and interest rates are low), may give a better return on investment. For example, in 2003, oil was trading at $ 25 per barrel, and are now trading at about $ 95 to $ 100 a barrel. When you buy raw materials, they usually buy a piece of paper saying something that you have and have the right to sell rather than take physical delivery of goods. This can result in commodity markets to be highly volatile and subject to events of the world? For example, the oil is passed when the United States invaded Iraq, rose again, when the terrorists were captured with the Saudi oil terminals? | And now, while oil is priced very high, there is also the ability to laxity in refineries in the United States, which is a strong indicator that the current position of oil is a bubble. Other products to consider for negotiation are the precious metals, when it affects inflation (and we are in the process, with the Fed to cut rates from a peak of inflation), precious metals tend to be a major classes of investments earnings exceed the rate of inflation. However, like oil, there is a serious risk of a speculative bubble, as was the early 1980 with the Bass brothers, and the money market. Finally, the environmental crisis is also known in the media and the demand for “green” biofuels are causing a huge increase in wheat prices, where subsidies for the planting of corn to produce ethanol for gasoline E85 exceeds the price of corn for crops by a factor of four. Although this will increase the price of food (a big order for inflation), it also means that trade in goods in corn, soybeans and other crops, is a worthwhile investment. The General Council in commodities trading is that when your assets reach the price point you want to sell, sell at least half to realize your profits, and sell off the other lots in the next two weeks in 5 to 10% . Like a game of High Stakes Poker, commodities trading rewards those who know when to leave the game rather than being kept in the attractiveness of the sirens of the pot continues to grow.