How risky are commodities?
People often cower in fear and mentally check-out when they hear the word commodities. They may have tried investing in commodities in the past and lost money, or heard horror stories of a friend of a friend who lost his shirt trading pork bellies. These thoughts can make investors fearful before carefully considering the benefits of managed futures. The difference between stocks and commodities is that commodities and futures employ leverage, which magnify the gains (and losses) when prices move. Being able to professionally manage the leverage employed with commodities is critical to controlling risk. To see how we manage risk, click here. For a detailed explanation of why most amateur investors lose money in the commodities markets, click here. For a thorough discussion of the risks involved with futures investing, consult our Disclosure Document (pdf).
