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Bonds Are a 'Safe' Investment: A Big Lie Gets Even Bigger"Powershares DB Agriculture Fund (ASE: DBA) is a new addition to the capital gains portfolio at TheMoneyMan.com Market Newsletter. Here the latest by BizRadio host Daniel Frishberg.
"An area of the market that hasn't been affected by the economic slowdown and isn't correlated with the equities has been the commodity markets. Global demand for commodities has continued to increase.
"This has lead to record highs for most commodities, including soft commodities. We expect this to continue. There are several reasons for this.
"First, emerging markets are developing at a rapid pace and their populations are becoming richer and can now afford to eat better. That leads to higher prices in soybeans, corn, wheat, etc. Second, there are government mandates for producing ethanol which has driven up the price of corn.
"Third, there is simply a shortage of food. In fact, just yesterday, Bloomberg reported that rising food prices in Egypt have caused riots and long bread lines. Food prices are up 20% just in the last year. Last, commodities are priced in dollars. As the dollar has weakened, money has poured into commodities.
"To benefit from these factors, we're purchasing an exchange-traded fund that holds the actual agricultural commodities. Powershares DB Agriculture Fund is an easy way of investing directly in commodities without having to open a futures account.
"Recently commodities did sell off as we had anticipated. However, they have resumed their bull market uptrend. This is despite the Chicago Mercantile Exchange raising margin requirements to buy certain commodities a couple of weeks ago. This illustrates the true global demand for commodities."
Each day, Steven Halpern's TheStockAdvisors.com offers the latest market commentary and favorite investment ideas from the nation's leading financial newsletter advisors.
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