I Want to Invest in Commodities ?
Sunday, November 22nd, 2009 at
2:50 am
mansu asked:
I want to invest in commodities trading in through mutual funds. However, I don’t want to trade directly in commodity futures. Are there any index funds in India that invest in commodities? Also, is it a smart idea to invest in commodity index funds instead of commodities directly? As I understand it, index funds are safe because, I don’t have to invest more money when the commodities do down.
I want to invest in commodities trading in through mutual funds. However, I don’t want to trade directly in commodity futures. Are there any index funds in India that invest in commodities? Also, is it a smart idea to invest in commodity index funds instead of commodities directly? As I understand it, index funds are safe because, I don’t have to invest more money when the commodities do down.
Filed under: Commodity Trading
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A Mutual Fund is a New Issue when purchased. It is a long term instrument. By its very definition, there can be no direct correlation between that, and the commodities market(s). Commodities are usually short-term investments. Many contracts are 90 days or less.
Commodity futures, and indices, are an extremely poor investment for a novice. They are all short-term prospects, require one to act quickly (in the purchase/sale), and therefore are unsuitable for one who does not “sit” at trade desk.