[lemonlenny]

my potential broker keeps pushing me to buy U.S. corn. the prices have already risen by more than +70% in 6 months.

what do u folks think? i know nothing about corn.

[KnowItAll]

Its not corn that you're investing in .. its Ethanol ...

[Boris]

I think if you do some reading on the subject ( Corn, Farm land and Ethanol ) you may feel that you are being asked to get in at the top of the market - or near to it.

For me this adviser might have been better giving you advice 6 months and 70% ago.

Investing in a fast rising commodity needs a LOT of luck and timing extraordinare. For me I wish I had put money into sulphur.
rising from USD60 to USD700 in the same period your adviser thinks 70% is a good. Ok, sulphur is not overtly sexy, but once you do your homework you can see its and even more vital commodity that what your guy is asking you to get into.

[TBJ]

Personally I would rather be invested in metals than agriculture.

The rise in corn prices is due to supply side issues while demand has been increasing for biofuels. I think the supply side will be quickly remedied, which will bring back down prices.

Metals on the other hand are not subject to such supply issues and demand keeps increasing for all types. Prices have nowhere to go but up unless demand starts to fall.

[KnowItAll]

>> I think the supply side will be quickly remedied, which will bring
>> back down prices.

Given how inefficient ethanol productions is, I'd not be too surprised if the demand side is fixed too.

[Boris]

Also - an article on CNN about US Farm Land prices peaking.

Made comment that acre for acre there is much more money to be made in Soya bean . Therefore farmers plant this over corn. This story revolved around one farmer who had gone the other way " to help feed the world ".

Good story byline but I doubt of any real value.

[lemonlenny]

again i know nothing about this stuff. but i did a search on reuters with quite a few articles. it seems there is so little supply that it's almost impossible for prices to come down soon.

this was my interpretation of the articles anyways....
http://www.reuters.com/article/inDep...38202320080328

[KnowItAll]

It is not about prices coming down. It about them going up another 70% in six months.... which is what your investment adviser is hinting at.

[Crocodile]

Originally Posted by lemonlenny

again i know nothing about this stuff. but i did a search on reuters with quite a few articles. it seems there is so little supply that it's almost impossible for prices to come down soon.

this was my interpretation of the articles anyways....
Markets nervous: will U.S. plant enough corn? | Reuters

Oh dear, the use of "almost impossible" is worrying. Nothing is "almost impossible" in the trading market. Ever hear of a company in the US called Enron or an investment bank & securities trader called Bear Sterns?

My advice to you is don't invest your hard earned money in something that you don't understand. Yes, you pay a broker for his advice, but that doesn't mean you should take it. You are right to do your own research.

But, saying all of that, if the investment suits your risk profile and you are happy to allocate some money into it, then go for it. I would not consider this to be a blue-chip investment though, so would keep it to a very small portion of your portfolio.

[TBJ]

That's right on. Never say anything is impossible. That type of reasoning has bit me in the ass hard and I vow never to repeat that mistake again.

Diversification is your key. Don't be a speculator, there's no difference between that and gambling.

I don't know if there is a bubble forming in commodities, as I believe there is a sufficient base supporting prices where they are at now.

I think your best bet is diversify into energy and all types of commodities.

Originally Posted by Crocodile

Oh dear, the use of "almost impossible" is worrying. Nothing is "almost impossible" in the trading market. Ever hear of a company in the US called Enron or an investment bank & securities trader called Bear Sterns?

My advice to you is don't invest your hard earned money in something that you don't understand. Yes, you pay a broker for his advice, but that doesn't mean you should take it. You are right to do your own research.

But, saying all of that, if the investment suits your risk profile and you are happy to allocate some money into it, then go for it. I would not consider this to be a blue-chip investment though, so would keep it to a very small portion of your portfolio.