Commodity Investing — A Better Way
Commodity investing can be a very speculative adventure. Most investors fail miserably at it, and it can be very risky. Does that mean you should do it? Most of the time I do not suggest investing in this area. Although commodity investing may be a good tool to combat inflation (at times), it’s the risk that usually ends up hurting investors- until now.
If you could invest in commodities, and know that you couldn’t lose your principal, pay no fees for this protection, and have this strategy FDIC insured, wouldn’t that make sense? Of course it does. And now you can allocate some of your portfolio in commodities knowing that you can’t get burned, and that it is FDIC insurance backed!
If you would like to know more about this strategy, and potentially a good investment play, give me a call.
We are happy to offer for the first time an “annual income” Market Linked CD linked to a basket of commodity sub-indices.
The underlying commodity sub-indices are are a part of the recently released S&P GSCI Dynamic Roll index. It is an “enhanced” version of the widely recognized S&P GSCI Commodity index, designed for investors seeking long only exposure to the commodity market but with the desire to reduce the potential negative impact of contango on roll returns.
According to S&P:
“The S&P GSCI® Dynamic Roll Index is the first dynamically rolling commodity futures index to be offered by a major index provider. Employing a flexible monthly futures contract rolling strategy, the index is designed to meet the demands of investors seeking to alleviate the negative impact of rolling into contango and potentially limit volatility exposure to the commodity market.”
Since January 1995, S&P GSCI Dynamic Roll index shows an outperformance over S&P GSCI Commodity index by over 900 bps per annum.