The absence of commodity risk entices Gleason further.
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Although buying stocks of commodity related companies can provide additional risk over direct commodity investment, there is some evidence that investors are being compensated for those risks.
He figures one of the keys to succeeding in commodity markets is risk management.
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He was previously Watson family professor of commodity and financial risk management at Oklahoma State University and a faculty member at University of Michigan, University of Chicago and Washington University.
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Producers often have a limited time to begin drilling once they lease property, which leads many to drill wells regardless of commodity prices or risk losing their hold on reserves.
One last possibility: You are using commodity futures to hedge risk-for example, on taking a consulting contract for which you will be paid in British pounds.
Or, on given days during the uncertainty the gold market could see selling pressure if it decides follow the rest of the raw commodity sector and act like a risk asset.
Now that commodity prices have plunged, the inflation risk has dramatically receded across the rich world.
And the risk of manipulation of food commodity prices has a big impact on a lot of people, some of them very vulnerable to fluctuations.
But as of late the gold and silver markets have opted to trade on a daily basis more like their raw commodity counterparts and be more of a risk asset.
Commodities were in focus once again, as copper and crude-oil prices fell sharply as investors dumped assets across the commodity complex due to broad-based risk aversion and lingering concerns over growth in China.
The market place is a bit more stable this week, which has been bullish for the gold market as it is behaving like a risk asset and following other commodity markets at present.
If you look at funds that are investing in it, there were no pure plays until ours came out, so even traditional investors in the MLP asset class are overlooking commodity opportunities because of the perception of risk.
As investors remain wary of risk involved in equity and commodity assets in the short term, Berkshire Hathaway sage Warren Buffett is in India, where he advised investors to stay out of long-term dollar-bound bonds, according to Bloomberg.
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Also, the precious metals on this day have decided to follow the weak raw commodity sector, which is pressured by the risk aversion in the market place Wednesday.
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Precious metals traders are presently wondering whether gold and silver will benefit further from an escalation of protesting in Greece, due to safe-haven buying, or whether the metals will by clumped by traders into the general commodity sector and face selling pressure due to risk aversion.
Selling over the past couple of trading sessions has been violent and panicky, as steep declines in the price of bullion were accompanied by the breaking of key technical levels, sparking stop-loss selling, margin calls, and then risk managers and asset allocators offloading commodity holdings to build cash levels.
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There also seems to be less nervousness about holding risk assets, said Sterling Smith, commodity trading adviser and market analyst with Country Hedging.
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The study by Robert Johnson mentioned earlier suggests that the contribution to risk-adjusted portfolio performance of indirect commodity investments was better than that of direct investments.
If Netscape remained the leading supplier of browsers, Windows would risk being turned into an almost irrelevant commodity, and Netscape rather than Microsoft would control the gateway that leads to the Internet.
" Speaking via satellite from Washington to the International Monetary Conference in Barcelona, Spain, Bernanke also noted that even though the foreign exchange value of the dollar has been relatively stable in recent months, "the possibility that commodity prices will continue to rise is an important risk to the inflation forecast.
In times of falling equity or commodity markets, rising bond yields, inflation or increasing risk aversion, gold shines.
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The big banks can manipulate future metal commodity prices but small speculators are learning the game by reducing risk and removing stops.
Meantime, risk assets such as world stock markets and many commodity markets, and the Euro currency, were pressured on the Italian vote news.
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There has been a modest increase in investor and trader risk appetite Monday, which is supporting the raw commodity sector, including the precious metals.
But, to my earlier point, when we did the analysis behind it, we found no greater fundamental risk, meaning distributions were no more tied to commodity prices than the infrastructure plays.
While commodity prices are being fueled in part by excess liquidity chasing risk, as developed economies follow through with loose monetary policy, the dynamics behind emerging market currency fluctuations, especially the real, are traced out by their interaction with China.
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There has been a modest increase in investor and trader risk appetite early this week, which supported the raw commodity sector, including the precious metals.
These are not major worries in the market place, but just enough to nip investor risk appetite and put some downside pressure on the raw commodity markets, including gold and silver.
In particular, by keeping interest rates too low for too long, the Federal Reserve under Ben Bernanke has underpriced credit and increased risk taking, fueling asset bubbles in the bond and commodity markets.
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