Investing in Commodities – How Managed Futures Can Improve Your Portfolio

When someone wants to look to commodities as an investment, they are often curious as to what types of investment they should pursue. Should they go off and trade on their own? No, because most likely someone who is looking to invest does not have the decades of experience and the technical savvy it takes to become a successful day trader. An obvious choice for these people would be to invest in a managed futures fund.

In case you did not know already, an investment in managed futures acts very similar to a mutual fund. You would simply invest your money in the fund, and a CTA (Commodity Trading Advisor) would trade the account on your behalf. In turn, you would receive monthly statements from your CTA regarding your account balances and open positions, as well as have access to your account information in real-time. This type of program is the optimal investment vehicle for people investing in commodities.

How popular are commodities investments in the investment world? Is investing in commodities for me?

When you are looking for investment ideas to diversify your portfolio, you will hear more and more about futures funds. Over the past 30 years, the funds of people investing in commodities, more specifically commodity funds, have skyrocketed past $130 Billion. The popularity of these funds seems to be rapidly increasing as time goes on.

Yes, there is a reason for the growing popularity of investing in managed futures. For the first time in over 60 years, the stock market has had a 3 year decline in returns, and the market has not achieved its highs from 1999. As a result of the recent poor economic conditions, corporations continue to fail striking fear in the markets, and hence, increasing the volatility of the markets.

Investing in commodities, you are investing in futures and futures options. Futures are generally uncorrelated with the equity markets. Many professionals in the financial industry believe this makes a commodities investment an effective diversification strategy.

When looking to invest in commodities, two managed futures funds come to mind. The first fund, called the Epoch3 Program, was incepted last July of 2009 and has returned +39.59% in the first 11 months.

The second fund, called the Medallion Program, was incepted last February of 2009 and has returned +47.08% in its first 16 months.


Penny Stock Investing Doesn’t Have To Be Scary

If you truly want to get your stock investor friends talking and excited, possibly in a bad way, raise the topic of penny stock investing. At the very least, your conversation won’t be dull. Don’t be surprised if a few disagreements or debates break out. This should not be surprised. After all, penny stock investing is one of the least understood forms of investing in the market. Too many people equate it with shady companies, dead companies, or ‘forgotten’ companies. To many investors, the term ‘penny’ in penny stocks make them think that this particular equities market is not worth their time and bother. Well, that’s their loss… and more potential profit for you and others who bother to understand what penny stock investing is all about and how to make money from it.

Let’s get one thing out of the way-penny stock investing is still stock investing. The only difference is the level of regulation, the size of the market, and the prices of the stock involved. Still, regardless of how you look at it and what point of view you have, penny stock investing is still stock investing. Keep that in mind. The same general principles of equity investment still apply. Those principles never go away even though penny stocks often involve less volumes, lower prices, and very little analyst attention. With that out of the way, another key point also needs to be made: you can make great money through penny stock investing. You just need to know what you’re doing. Keep the following tips in mind so you can get a better idea about stock investing.

Getting away from the shadow of pump and dump scams

The main reason many seasoned investors are scared or skeptical about penny stock investing is the threat of ‘pump and dump’ scams. These scams involve speculators scooping up a huge block of a cheap stock. The scammers then issue press releases or get involved in all sorts of awareness raising schemes that bring more investor attention to the stock. In extreme (and illegal cases), they make all sorts of false or misleading claims regarding the company behind the stock. Due to the fact that the stock is lightly traded, any upward movement in its price makes for eye-popping appreciations. This creates a snowball effect as the speculators publicize the handsome increases in the stock’s price and more investors get in on the action. As a result, the stock’s price continues to spike up. In fact, in many classic pump and dump situations, the short-term gains are nothing short of amazing. Well, this party has an unhappy ending when the stock’s price bursts and crashes down when the speculators dump their holdings. Just like with any stock, when other investors see the downward trend, they unload and this pushes the price even lower. At the end of the process, the speculators make off like bandits and legitimate investors walk away with a loss or hang on to nearly worthless stock. Situations like these make many investors wary of penny stock investing. Thankfully, pump and dump schemes are exceptions and not the rule in stock investing. The good news is that you don’t have to automatically suspect pump and dump schemes when considering penny stock investing. Are they a threat? Sure, but with the right training, you can spot them a mile away and avoid them. Instead, you can focus on genuine penny share opportunities.

It’s all about finding hidden penny stock gems

In many ways, penny investing is not much different from trading in regular stocks. It is all about finding hidden gems. You need to find stocks that have a decent enough upside value that you can trade them over the medium to long-term. The first step in finding hidden gems in penny stock markets is to realize that not all penny stock companies are ‘loser’ companies or worthless companies. There are many reasons why companies trade on the pink sheets or bulletin boards. Each company has its own particular reason. You need to examine these companies on a purely individual basis. Only when you do so, can you realize the fundamental and real value each company brings to the table-if any. You still have to look at financial statements. You still have to look at market positioning. You still have to look at the fundamentals to tell which are diamonds and which are chunks of coal. The good news is that once you identify companies worth investing in, you can easily take a position since the company’s stock price is so low.

Momentum plays in under appreciated markets – time to invest

Believe it or not, there are momentum plays available even in penny stock investing. That’s right-you can make money in high volume, volatile stocks by playing momentum. While many investors think that momentum invest in stocks during momentum to reduce your chance of being scared trading happens only with regular stocks, they are truly leaving money on the table when they overlook penny stocks. The great thing about momentum penny stock investing is that you can buy in cheaply and make money on volume. Of course, you need to buy stocks that have the right level of volatility and trading volume.

Getting in on the next big thing can reduce fear

Another key factor you need to appreciate when considering penny stock investing is that there are genuine stock trends in pink sheet stocks. These are real companies that were down on their luck for a long time and finally are managing to get their corporate acts together. These are more common than you think-and they make for great stock buying opportunities. You literally get to ride a company’s rise to recovery. Once the company full recovers, it might get acquired and your holdings might explode in value.

Make no mistake about it, penny stock investing is not for the faint-heated due to all the negative buzz about there regarding this type of stock investing. Still, from a purely fundamental perspective, there is very little separating penny stock investing from regular stock investing. You need to do your research. You need to spot pump and dump scams from genuine opportunities. And you need to know when to get in when a penny stock is poised for some quick and dramatic upward movement.


Where to Invest in a Roth IRA Depends on Your Investment Intentions

If you’re looking to find out where to invest in a Roth IRA, then I’m sure you’ve already realized all the benefits a Roth IRA can provide for your retirement future. Roth IRAs a a great way to build a substantial retirement nest egg and capitalize on tax-free investment profits. Can you imagine how fast your nest egg will grow when you are able to put 100% of all your profits earned with your retirement savings back into your account? Where to invest in an IRA depends on what type of investing you plan on practicing, which we will go over in this article.

First of all, it’s worth mentioning the maximum income for a Roth IRA. The maximum income for a Roth IRA is $100,000 if you’re single and $159,000 if your married filing jointly. This means that if you’re even thinking of opening a Roth IRA, you must make less than the amounts above. If you meet the maximum income for a Roth IRA requirements, then keep reading.

Alright so like a said before, where to invest in a Roth IRA depends on what kind of investing you plan on doing. Not sure what it is you want to invest it yet? I suggest that you decide this first so you can choose a Roth IRA provider that can meet your individual needs.

One place where you can invest in a Roth IRA is the bank. Banks are the best place to invest if you don’t have much money to invest at the beginning, as their minimum investment amounts are usually much lower than other providers. However, banks tend to provide very little choices as to what you can invest in with your account. Most of the time, they only allow you to invest in company stock or other securities that they can profit from. And, even though they can guarantee you a certain return, it’s often a very low one.

Another place to invest in a Roth IRA is a mutual fund company. These companies allow you to choose which of their mutual funds you’d like to invest in- whether it be stocks, bonds, or other securities. But again, your choices of investments are very limited. Nonetheless, this tends to be the most popular route people take when opening a Roth IRA. This is also why so many people’s retirement accounts are hurting right now.

You can also invest in a Roth IRA at brokerage firms. Brokerage firms are like investment “middle-men,” so be ready to pay various fees and expenses. They are most often connected to purchasing stock shares (which they suggest to their clients). But, some do allow people to research and decide which stocks they would like to invest in.

Here’s an option where to invest in a Roth IRA that I strongly recommend you consider. You can open a Roth IRA with a trust company. Retirement accounts managed by a trust company are usually self directed IRAs. The account holder is in sole control over a self directed IRA and chooses which assets to invest in. You can also choose from a much wider array of investments besides your ordinary volatile securities. With a self directed IRA, you can invest in real estate, energy properties, green energy, businesses, gold, tax liens, and much more. You can find out more about self directed IRAs by reading more of my other articles.

In today’s current economy, real estate provides investors with huge opportunities. Before the housing bubble burst, many contractors were concentrated on building elaborate, “McMansion” type homes that cost over $250,000. As a result, many people could not afford or handle the payments on these homes, and defaulted (you can leave these homes for Realtors to deal with).

Today, there is a hidden real estate market out there that has recently formed, and people are taking advantage of it as we speak. Many working class families are searching for a home they can afford, preferably under $150,000. But with all the recent concentration on selling huge, expensive homes, these families are left with no place to call “home.”

I know of a company that has taken the initiative to provide affordable housing to these kind of families. What they are doing is allowing private investors to get in on all the action! Many investors are experiencing huge returns around 15%, 25%, and even 40% each and every year. And since they are investing with a Roth IRA, all the profits they make are never taxed!