Commodities: Buy When The World Is Selling

Ted

FYI: (Click On Article Title At Top Of Google Search)

Commodities are an outlier at a time when most asset classes—stocks, bonds, real estate—are at or near record levels. Oil, the most important global commodity, is down 18% this year, to $80 a barrel, and many others, including natural gas, copper, and corn, are also in the red. Corn is down more than 50% from its 2012 high, to $3.75 a bushel. On Friday, gold hit a new 2014 low of $1,171 an ounce and is 38% below its peak of $1,900 in 2011.

The sector has few fans, a far cry from the situation in 2008 when oil hit $140 a barrel amid talk of structural shortages and a commodity supercycle. The current disfavor ought to pique the interest of contrarians. This could be a good time to allocate money to commodities, especially for investors with little or no exposure to the group
Regards,
Ted
https://www.google.com/search?newwindow=1&site=&source=hp&q=commodities+buy+when+the+world++baron's&oq=commodities+buy+when+the+world++baron's&gs_l=hp.3...1350.15835.0.16157.39.38.0.1.1.0.76.2135.38.38.0....0...1c.1.58.hp..17.22.1264.wUfyd1rpzU4

ron

A good idea. Any suggestions for a diversified commodity managed futures ETF?

scott

ron said:

A good idea. Any suggestions for a diversified commodity managed futures ETF?

Be VERY careful with any of the futures ETFs, as many/most of them end up resulting in K-1's. If you want commodity futures, I'd go with a mutual fund instead, such as one of Pimco's commodity funds, or AQR's (or one of any number of others.) If you don't mind K-1's, that's fine, but personally, I'd rather not deal with them if there's a clear alternative, like there is in this case.

ron

I should have mentioned it would be in an IRA. No K-1 that I'm aware of.

scott

ron said:

I should have mentioned it would be in an IRA. No K-1 that I'm aware of.

CTF is trading at a nearly 20% discount to NAV.

Some have suggested it should be restructured:

http://seekingalpha.com/article/2569765-nuveen-long-short-commodity-total-return-fund-should-be-restructured

However, that's a commodity futures CEF that's trading at a nearly 20% discount to NAV. There is the potential for capital appreciation is commodities bounce back and, if something happens (restructuring, etc) narrowing of the discount, although there is certainly no guarantee on a restructuring happening.

TSP_Transfer

A L P s seemingly has an answer for commodity exposure in a M F.Do not own either with REALX on my watchlist.
http://www.alpsfunds.com/

JCRAX
http://www.alpsfunds.com/overview/alpscorecommodity-management-completecommodities-strategy-fund
REALX
http://www.alpsfunds.com/overview/alps-real-asset-income-fund

A tougher 3 months with the commodity down draft.
http://performance.morningstar.com/fund/performance-return.action?t=REALX&region=usa&culture=en-US