Commodity windfalls ahead … or not?





Dear Subscriber,

For the past week or so, I’ve been meeting our readers on my personal blog to talk about how a prudent investor might build the optimum growth portfolio for 2010.

It’s a crucial question: Diversifying your money across the asset classes that are most likely to surge in the months ahead can make all the difference in the world. It helps ensure that all the items in your portfolio works together synergistically to boost your profit potential and cut your risk of loss.

So far, we’ve examined U.S. stocks … foreign stocks … fixed income investments … precious metals … and foreign currencies. Today, I need you to weigh in on our final asset class: Commodities.

First, though, let’s take a look at some of the answers to yesterday’s questions:

Do currency ETFs have a place in your portfolio?

Which currencies — the U.S. dollar, Canadian or Aussie dollar, euro, Japanese yen, Chinese yuan, Brazilian real or others — are you most bullish on right now?

What percent of your total investment capital do you invest in currencies?

At least one-third of our readers flatly reject the idea of diversifying a portion of their money into currencies …

William B. lacks the confidence to include currencies in his portfolio: “To be honest, I am not confident enough to invest in currencies with my level of expertise and have no currencies in my portfolio. I would include the Brazilian real if I were to invest in that market.”


Eugene agrees: “I am convinced that one can profit handsomely in [foreign] exchange,” he writes. “But that is too speculative for me. I’ll leave that to the Big Boys!”

But at least two-thirds of our readers disagree, saying that currencies can and should play an important role in a well-diversified portfolio:

According to Mike M, “Currencies, as of the past two years have been a part of my portfolio as a means of diversification. By trading currencies, I have broadened my knowledge on macro-economic and global situations, thus allowing for better decisions to be made regarding my trades.”


James P., who says he’s “all into currency,” writes: “I like currency ETFs and the likelihood of the dollar rising for now against the euro and British pound.”


Rachel D. says, “I have about 20% invested in currencies. I believe that the Norwegian krone and the Canadian dollar will do well this year.”


Gerard M., who also invests 20% of his portfolio in currencies, writes, “Currency ETFs are the answer to those of us not adept at the ‘currency’ market. I favor Brazil, China, Australia and Canada, the latter two for their commodity stash.”

Once again — remarkably well-informed insights and ideas!

And tomorrow, we’re going to summarize ALL of your responses to each of the asset classes we’ve examined — and begin the process of constructing the optimal growth portfolio for 2010.

First, though, I need your answers on our final asset class:

What portion of your portfolio do you have invested in commodities and natural resources?

Which commodities do you prefer?

And what instruments do you use — commodity ETFs, commodity stocks, futures, other?

Your answers will go a long way towards helping me help YOU build a more profitable portfolio for 2010.

Just click this link and leave a comment to share your thoughts. I’ll add my own thoughts as well.

Good luck and God bless!

Martin


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