Protecting your Net Worth with Trading Commodities
Many have thought trading commodities was risky and not prudent.The fact is, as in everything there are risks. Even just staying in cash is risky with the potential of a currency devaluation. Just look at the Singapore Dollar or the British Pound. For those who lost money there were those who trade forex that made money.Many people now are getting into forex currency trading. However one needs to very aware of the risks and mitigate the leverage.
Even the blue chip stocks in this stock market crash have not been saved. The Blue Chip stocks are considered by many to be risky.Just look at Microsoft which reported a 32% decline in profitability. This is Microsoft’s first quarterly revenue decline in all of its 23 years. Wow…! Not pouring more oil on the fire, bank after bank might need another $1 trillion of capital. Where is that money suppose to come from? So where do you put your money? What do you do to invest?
Probably any smart high school student virtually anywhere around the world knows printing money is one of the causes of inflation. More so, as the printing presses run the value of currencies fall and commodity prices increase. Thus it should be somewhat intutitive that trading commodities can potentially be lucrative. This does not mean go jump out and open an online commodity trading account so quickly. Nope…One needs to gain education and learn. I suggest reading Michael Covel’s book on Trend following. You will learn there are CTA ( commodity trading advisors) that have been around since the 1980s and before. They are still in business…compounding money over time. It is not an easy ride at times. There are draw downs which can be seen as volatility. The key is find the right CTAs that understand risk and implement a risk management strategy. In the 1970s and 1980s tremendous money was made in commodities. Time will tell if this is the direction economically we are headed. Inflation is a wealth destroyer. Protect your net worth. Get up to speed on Trend following.