Ted, would you be willing to talk a bit about commodities?
Sort of. *Since commodity trading is basically a zero sum game, I'd be pretty stupid to broadcast my strategy over the Internet. *Likewise, any advice that you see given away, or even sold, should be highly suspect. *And there are a bunch of "professional traders" out there trying to sell people on their schemes for allegedly "beating the market" (which necessarily requires them to beat each other).
What I will say is that I regard the most "conservative" approach to commodities trading to be one of going long on long-term futures on economically vital raw materials. *Of these, the most vital, with the longest term contracts available, is crude oil. *And the astounding thing about oil futures is that the distant futures trade at a big discount to the spot price. *The only reason that I can think of for this is that oil producers must go short on long-term contracts when the price exceeds their costs of production, thereby locking-in a profit on future production.
The one disadvantage to trading long-term futures contracts is that they have a large spread between the bid and asked price. *All securities that are traded in secondary markets have this bid/asked spread, and I must admit that I wasn't aware of the cost that it adds to trading until I did some transactions on thinly traded futures contracts. *For example, a December 2007 contract on crude oil might go for days without there being a trade, and might have a standing asked price of $27.30 per barrel and a standing bid price of $26.80 per barrel. *So, at 1,000 barrels per contract, you could "buy" (go long) a contract at $27.30 per barrel, soon afterwards decide to "sell" (liquidate) it at $26.80 per barrel, and immediately lose $500 ($1,000 barrels @ $.50 per barrel) plus the brokerage commission on two trades.
What you need to do is to "get your feet wet" by acquiring one or a very few long-term contracts that you can afford to hold onto even if the price drops (which will require you to put up money on margin to cover your loss on paper). *The commodities that I find attractive are crude oil, copper, natural gas, and lumber (although for practical purposes the contracts on it only extend for about 6 months.) *As the contracts approach expiration, they become a lot more liquid and can be liquidated at a reasonable cost and "rolled over" into long-term contracts. *If you believe that inflation will cause commodity prices to continue to increase in the future, then going long on commodity futures contracts is a way to cash in on that prospect. *But if anyone chooses not to trust my advice on this, that's OK with me *