Does anyone here know about commodoty investing and any books that I could read on them or websites I could learn about investing in them?

I have just started doing research on Commodities, also.

Jim Rogers is a bit of a guru. You could do worse than read some of his books and online material.

http://www.rogersrawmaterials.com/page1.html

http://www.financialsense.com/rawmaterials/main.htm

I've just got his book "Hot Commodoties" and am half way through it. It's quite good so far, and an easy read.

Basically the book argues that commodoties will rise because:

- Shares (and bonds and Real Estate) are overvalued and won't grow
- Commodoties have been cheap so no capital has been invested
- China's industrialising and so will be a voracious consumer
- Load's of money has been created, which means inflation is due for a comeback
- Investors don't understand the market yet and so some bargains are coming

Not only that but the bull market is likely to last for a few years yet - it started in 1998 and commodity bull markets last for an average of 17 years.

There are a number of ways to invest - buying commodoties, commodity companies, funds (like Roger's own) and futures.

He then goes on to survey a number of commodity classes:

- Gold - near to fully valued (unless economy collapses) as mines opening and a community of "Gold Bug" investors
- Oil - probably near its production peak with increased demand from places like China
- Coffee and Sugar - Very undervalued at present and both have a tendency to grow quickly
- Lead - Production has dropped but demand - especially for car batteries is still growing.

There's plenty in there that I've left out.

Now - has anyone got good ideas for how a retail investor should put his money in commodoties?

I also picked up "Hot Commodities" from the bookshop last week, but currently finishing another book and haven't got around to reading it yet. Certainly looks like an interesting read and not too heavy going. I'm probably not as fast a reader as you, IPN.

Comments I've read on amazon say that the book gives the "whys", but not the "hows". Personally, I would have thought that buying shares in companies that produce these commodities would be a good starting point!

Lots of 'tips' in the book, like investing in commodity futures, could leave a lot of readers with 40,000 barrels of oil or 40,000 lbs of beef sitting in thier garden and wondering what to do with it all.

Its nonsence that the futures market is a place for ordinary investors. This is the problem with the book - it basically points to his fund which is expensive. The CRB is at record highs now also.

Yes, it is one way. However they tend to lag the commodoties themselves. This surprised me as I would have thought that profits, and so dividends, would have outperformed commodity prices as they are leveraged by company debt. There are other factors to consider it seems.

What I'm looking for is a diversified commodity fund (such as the one Rogers runs in America) and I will start investigating specific commodities later on. I also agree with Rogers that China is likely to bust up (temporarily) quite soon which might be a buying opportunity. One problem with all this dreaming is that I'm also supposed to be buying a house, so commodities are probably not the best place for the waiting fund.

IP newcomer, I have part way through the book as well. I am a complete beginner in investing and would also like to try and invest some money in commodities. I havent looked much but I would imagine that a commodities fund may be hard to come by- In that there is such a huge variation in commodities. If you happen to find one though, do let me know!

PS: we could just go halfs on 5000 Bushels of corn? If the investment doesnt go to plan, we could always eat it

Expensive in what way?

I'll try looking through Motley Fool to see if any of their boards point to some commodity investments. Or may try to start a board (if enough people are interested).

There is a fund that may meet peoples requirements, JPMF natural resources. Quote:

To provide a portfolio of shares in companies throughout the world engaged in the production and marketing of commodities. The Fund aims to provide capital growth over the long term.

I am considering putting a small amount of money here, but the fact that it has gone up 150% in the past three years and 220% in the past five makes me a little worried that its too late!

The fund is 60% weighted towards industrial materials, I am assuming that means materials with some application in manufacturing. So this would exclude coffee, rice, grain etc.

Has anyone else got any opinions on this fund?

This is not a recommendation.

One could try Investec's Global Energy fund:

http://www.investecfunds.co.uk/uploads/glo...rgysalesaid.pdf

HTH