"Population growth will likely spur increased demand commodities," says ETF expert Doug Fabian. In Making Money Alert he looks at PowerShares DB Commodity (NYSE: DBC).
"World population growth trends suggest massive numbers of new global citizens on the way -- citizens that are going to require essentials such as food, clothing and shelter.
"For investors who want to ride this population wave, I offer you the PowerShares DB Commodity Index, an exchange-traded fund that seeks to track the performance of the Deutsche Bank Liquid Commodity index.
"The fund invests in a portfolio of exchange-traded futures on commodities comprising the index. The index commodities are crude oil (35%), heating oil (20%), aluminum (12.5%), gold (10%), corn (11.25%) and wheat (11.25%).
"With economies around the world struggling to recover from a global recession, commodity prices as represented by DBC have been kept well below their long-term, 200-day moving average.
"However, the protracted pullback in commodities likely will prove to be temporary, and that could mean a very nice buying opportunity in DBC.
"DBC revolutionized the ETF market by providing a way to invest in commodities. The fund not only contains popular picks such as gold, but it also includes soft commodities, such as corn, and that makes it different than other commodity funds.
"Because natural resources offer comparatively low correlation to other asset classes, they can outperform other investments, particularly when the stock market is lagging.
"An allocation to commodities also can help reduce the overall volatility of a portfolio. Of course, the commodity markets can be very volatile, so be sure you are ready for a roller-coaster ride if you decide to climb aboard the commodity wagon."
Steven Halpern's TheStockAdvisors.com offers a free daily overview of the favorite stock picks and investment ideas from the nation's leading financial newsletter advisors.
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