5 Best Commodity Plays For This Year

I predict that over the next few years, the commodities markets will be the most profitable place to park your money. You don't want to miss out on this truly once-in-a-lifetime market opportunity. We are, depending on who you ask, entering the next phase of potentially the biggest major move in the commodity markets in the last 30 years. Almost every market has had a run up, settled back down a bit, and is now picking up momentum back to the upside. If history can shed any light on the current situation, prices of almost every commodity will likely break out to new all-time highs over the next two to three years. Here are my picks for the best trades for this year:

1 - Gold
Keep buying it. In my estimation, the effective "floor" in the gold market, at least for the next several years, is now around $550. After an initial run-up over the $600 an ounce mark, the gold market went through a correction/consolidation phase, retracing about half the distance between $625 and $525. It is, as of this article, back near the $630 level. Look for gold to surpass its former all-time high, and move well above $1,000 an ounce. Between gold and silver, to date gold has been the market leader, and that's why I would recommend it over silver. I would be floored myself to see gold fall back below the $500 level anytime in the foreseeable future--but I would not be fazed in the least to see the price of gold over $2,000 an ounce within the next 18 months.

2 - Cotton
Cotton has been, up to this point, sort of a "weak sister" in the overall bull market in basic futures prices. Whenever it finally joins the flow of the overall market, expect it to play catch-up very quickly. Currently, cotton is hovering around the 50-cent level, despite steadily increasing export demands from China and India, and because the cotton belt across the South still has not fully bounced back from the devastation of Hurricane Katrina. My expectation: cotton will double in price during the next 24 months.

3 - Wheat
Among the grains, wheat has shown singular determination almost since the starting point of the current bull market. Even on days when USDA reports sent soybeans and corn tumbling down, wheat was determined to forge ahead. My long-term price target for wheat is $8-$10.

4 - Cocoa
Cocoa has been a bit like the gold market--that is, it spent several years going hardly anywhere at all, and definitely not higher. Then, in the initial phase of the current bull market, it shot all the way up to the mid-20s in price. Since then, it has moved back down the to the $14-$15 level, and has recently shown signs of bottoming out and recovering. Look for cocoa, like nearly all other commodities, to zoom back up, setting new all-time highs during this second leg of the bull market. If you lost out on the run-up the first time, don't get left out in the rain again. Buy cocoa.

5 - The CRB Index
The CRB Index is the smartest way to achieve gains across the entire commodities market, which now happens to be the strongest bull market we have seen. In the 1980s and 1990s, investors often spent too much time researching winning stocks. In those days, it was practically a free ticket to paradise to buy into in the Dow Jones or S&P indexes. The CRB Index is the equivalent for commodities. Especially for beginning commodities investors, the CRB Index lets you earn from all market movement without having to specify a certain hot market and investment time. As in all markets, every commodity market can see-saw, but in general the market always moves up. We are in a bull market, after all.

The chance to make money in the commodity markets over the next 5 years is the single greatest investment opportunity that I have ever come across. I can't imagine another one like it within the next 50 years. Do not ignore this chance to amass a fortune that could make you set for life, in the space of just a few years.

About the Author:
Halston Adams worked as futures broker until he stumbled onto his recipe for producing impressive returns from successful traders he befriended. Find out more about his trading approach at: futures trading today.

Article Originally Published On: http://www.articlesnatch.com

Tags: trading

, futures

, commodities

, commodity

, stock

, forex

, money

, investment

, finance

, personal finance

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