Taulli - All about commodities: [the easy way to get started]

TOM TAULLI

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Chapter 1
Introduction to Commodities Investing

Chapter 2
The Futures Markets

Chapter 3
Understanding Futures Prices

Chapter 4
Futures Trading Strategies

Chapter 5
Options on Futures

Chapter 6
Fundamental Analysis

Chapter 7
Technical Analysis

Chapter 8
Precious Metals

Chapter 9
Energy

Chapter 10
Agriculture

Chapter 11
Industrial Metals

Chapter 12
Livestock and Dairy

Chapter 13
Investing in Miners

Chapter 14
Global Commodities Investing

Chapter 15
Buying Physical Commodities

Chapter 16
Funds

Look at the main drivers of commodities prices

Understand the benefits of investing in commodities

Discuss the risks

Commodities are pervasive throughout the world economy. Every day we buy food and energy. We drive our cars, which are made out of an assortment of metals and other materials. We live in homes and apartments, which are also made out of various commodities. Without these valuable materials, civilization would vanish. Its that simple.

On a global basis, commodities markets are massive and trade in trillions of dollars on a daily basis. There is also much diversity. For example, investors can invest in the following categories:

Agriculture: Includes corn, wheat, soybeans, cotton, sugar, cocoa, orange juice, coffee, and oats.

Livestock: Includes live cattle, feeder cattle, pork bellies, and lean hogs.

Precious metals: Includes gold, silver, and platinum.

Industrial metals: Includes copper, palladium, aluminum, tin, nickel, zinc, lead, and cobalt.

Energy: Includes crude oil, unleaded gasoline, natural gas, coal, heating oil, uranium, ethanol, and electric power.

There are also a variety of ways for investors to participate in these markets. For example, these include buying and selling futures and options. There are also exchange-traded funds (ETFs), mutual funds, hedge funds, and managed futures. And yes, you can even buy the physical commodity, such as gold or silver, and put the metals in a vault.

Over the past decade, there has been a major bull market in commodities. In fact, it has become a popular topic on cable business channels like CNBC and even mainstream websites. Perhaps one of the most interesting signs of the fervor is that even criminals are focusing on stealing commodities. For example, copper has seen a spike in thefts. After all, the high prices could mean substantial profits. It also helps that you cannot trace copper back to the source.

Criminals are stealing power lines and cooling pipes. Unfortunately, this poses serious problems to communities. Because of this, law enforcement agencies have been putting more resources into combating this new crime wave. Consider that a criminal was able to extract the copper from an irrigation system in Pinal County, Arizona. There was about $10 million in damages. The theft even ruined a harvest. In 2008, a report from Electrical Safety Foundation International (ESFI) listed over 50,000 incidents of copper theft in the United States. The total damages were $60 million.