Investing In Commodities

    Published: 06-16-2009
    Views: 9,801
    Ron DeLegge, Founder of ETFguide, explains how investing in materials is a way to include commodities in your portfolio.

    Ron DeLegge: If there is one major asset class that's missing from your investment portfolio, I am going to guess that it's commodities. I am Ron DeLegge with ETF Guide most of us just don't have enough space for green elevator or herd of cattle in the backyard.

    Beside storage issues though the problem with commodities is they have no earning, they have no dividend yield and that makes putting an accurate value on them very difficult. So how can you get commodities exposure a unique asset class, but without buying or investing in a farm.

    One idea is to invest in industry sectors that are closely linked to commodity prices. Among others as example material select sector SPDR ETF ticker symbol XLB, XLB contain exposure to 30 stocks within the S&P 500 that are produces of chemicals, construction materials, containers and packaging, metals and mining along with paper and forest products.

    Among the holdings in XBL are blue chips like DOW chemical, Monsanto and Freeport McMoRan. If you are looking to invest in commodities, but without buying the physical goods, take a look at materials, it's a great way to obtain commodities exposure to a basket of stock closing linked to this major asset class.