Use the ETF Market to ‘Mine’ Commodity Profits

The commodities market is a popular place these days. For investors not ready to leap into an “optimized” play, the ETF market is filled with opportunities.

If you are in the metals market, your eyes are certainly watching the action out of China. The more the country builds and expands, the higher its demand for anything that is pulled from the ground.

If you have been paying attention, you already know copper prices reached their highest prices since last October early yesterday. Buyers had to shell out $6,258 for a metric ton of the vital base metal.

While it is disappointing to see prices slipping today, it is no surprise. The commodities markets have often moved in lock step with the global equities market. And with mixed economic data coming from Beijing today, it is surprising prices are not down even further today.

Even with a few nuggets of less-than-expected data, China’s economy is one of the quickest expanding on the planet. Earlier today, Goldman Sachs (NYSE:GS) made the not-so-bold move of increasing its GDP expectations for the country from an annual rate of 8.5% to 9.4%.

Many investors are starting to wonder if it is time for Beijing to begin unwinding its recent stimulus measures.

No matter what the government does in the next few months, there is no debating China is at the center of the world’s commodity demand. Its desire to expand is the lifeline keeping the sector afloat.

With virtually no chance of a major disruption in its role, China is making the commodity and mining sector a fine investment.

Go ahead, make your move

While I have recommended several optimized plays for TFN Strategic Tradersubscribers, I know of plenty of investors looking for a plain-vanilla sort of way to play the situation.

Anytime we need simple, the ETF market is there.

The SPDR S&P Metals and Mining (NYSE:XME) fund gives investors a pure shot at one of the most potential-filled industries on the planet. The fund includes holdings of powerhouses like Massey Energy (NYSE:MEE), United States Steel (NYSE:X) andTitanium Metals (NYSE:TIE).

Between those three companies alone, investors get a shot at a recovery global economy.

Of course, ETFs are great investments for the set-it-and-forget-it investing crowd. But they are not for everybody. With diversification comes lowered risk and lowered reward.

And anytime you are paying somebody else to do your buying and selling, it will come with a cost. In this case, SPDR charges 0.35% of your position, a fairly low fee in a high-priced industry.

But if you have been watching the commodities sector on the sidelines, eager to make a move, and are unsure how to do it, I think you just found your answer.

ETFs are a great way to enter the investing world on a low-cost, low-risk basis.

Article source:-http://www.contrarianprofits.com/articles/use-the-etf-market-to-mine-commodity-profits/19898