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The No Risk Way To Invest In Commodities

By Dr. Steve Sjuggerud
Wednesday, April 19, 2006

“Quite frankly, I think commodities will turn out to be a fantastic place to invest for the rest of this decade.”

I made that statement a few years ago in my monthly newsltter True Wealth.  So far, I’ve been right, and we’ve been making a lot of money off our commodity-related plays for a few years now.

But what if you haven’t bought into commodities yet?  Is it too late?

Despite some big rises in the price of raw materials, I don’t think it’s too late to get in.  I actually think we’re still in the (somewhat) early stages of a great commodity bull market. 

Like I said earlier, commodities should turn out to be a great place to be invested for the rest of this decade.  And just a few days ago, I uncovered what might just be the ultimate way to play it...

It’s a way to own commodities – with no downside risk – through November of 2009.  Yes, it’s the holy grail of investing – you get huge upside potential, and none of the downside.

If commodities triple in price between now and 2009, you’ll participate in every penny of that gain.  (I mean it... you won’t even lose a little tiny amount – not even a commission or annual charge.)

Meanwhile, if commodity prices crash by 50% or more, you won’t care... you’ll still get 100% of your initial investment back in November of 2009.  It sounds too good to be true, I know.  But I am certain that it is ... I’ve been buying investments just like this for many years now.

Although this investment was created by the third largest brokerage house in the United States; this is no typical commodities play...

People typically “play” commodities through futures contracts or commodity-related stocks.  With futures contracts, you can make a ton of money (since you’re using leverage).  But you can quickly and easily lose a ton too.  That’s not right for us.

Stocks aren’t perfect either... as they can rise or fall with the stock market, and even if the commodity they do business in goes up, sometimes their stock price can go down.  So for maximum safety, I don’t want a stock. I want direct exposure to commodities...

The investment I’ve found is directly linked to the Dow Jones AIG Commodity Index.

The DJ AIG Commodity Index is a broad-based index of 20 different physical commodities. Unlike the other indexes, no single commodity is allowed to dominate the index. Here’s the break down...

The DJ-AIG Commodity Index
30%

   Energy

19%

   Grains (wheat, corn, soybeans)

21%

   Industrial Metals

9%

   Softs (sugar, cotton, coffee, cocoa)

9%

   Livestock (cattle, hogs)

9%

   Precious Metals (gold, silver)

3%

   Vegetable Oil

As you can see, the DJ AIG Commodities Index is an excellent representation of the commodity market as a whole. But here’s the best part...

The way today’s investment is structured, we make 100% of the gains if the DJ AIG Commodities Index goes up, but if it goes down, we won’t lose a penny. We get ALL our money back.

Let me repeat this extraordinary opportunity: You are guaranteed to get back what you started with -- and if the Commodity Index goes up, you'll make a profit. If it goes down... you won't lose a thing. You'll never get back less than what you started with if you hold this investment until it expires in November 2009.

So if the Dow Jones AIG Commodity Index goes up by 50% between now and November of 2009, you’ll get a 50% return.  If that index falls by 50%.  You’ll get all of your initial investment back.  No matter how much the index drops, you won’t lose a penny. 

Plus, you can buy this investment through your retirement account.

I think it’s a great deal... and it’s a little different from a typical “stock” investment. The only catch is that – to get in at the best price - you have to buy before April 28.

Due to the urgency of this situation, I spent the last 72 hours preparing a special report with all the details. 

These “holy grail investments” don’t come along very often.

Good Investing,

Steve





Market Notes


STOCKS HIT NEW LOWS AGAINST REAL MONEY

With one of the all-time great observations on the effects of inflation, Yogi Berra once said: “A nickel ain't worth a dime anymore…”

Yogi was referring to the declining purchasing power of paper money… and as today’s chart shows, the nickels we keep in the stock market are becoming worth less and less each day.

Our chart is the performance of U.S. stocks measured in terms of real money.  And by "real money" I mean gold. We see that stocks hit a bottom in 2003, and then began a rally. However, the price of gold has rallied much more. Gold has increased in price so much, that when we look at stocks vs. gold, we see stocks are at multi-year lows:

The S&P 500 vs. Gold (5-year chart):

There is a simple explanation for all this…

When the world’s central banks flood the world with liquidity and super cheap interest rates, the real value of our paper money declines against tangible “stuff” like oil, land, and gold.

And although our stocks have gained value in terms of dollars, when we take our profits and try to buy a tank of gasoline, a house, or a hamburger, we find our wealth hasn’t increased a dime. Rising oil prices have made gasoline more expensive. Soaring land prices have made hotel rooms expensive, with the average U.S. hotel room costing $90.

If you’re interested in protecting your wealth with gold investments, the absolute best place to get started is the True Wealth Gold and Collectibles Conference

This conference is your chance to learn the best ways to invest in gold and other “real assets” from Steve and several of the world’s leading gold experts. Perhaps best of all, you’ll hear the full story, first hand, of the company that will likely be one of the best performing gold stocks in 2006.



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