The Absolute Best Way to Own Commodities

Pop quiz...

You have two choices:

  1. Make 1,400% gains? Or
  2. Lose money?

Tough one, right?

Anyone would take a 1,400% gain over losing money. And today, I'll share one way you could have done it.

It's a special investment... the absolute best way I know of to own commodities. And I expect it'll soar in the coming commodity boom...

Now to make this 1,400% return, you would have had to step outside the box... and invest in commodities in a different way.

This week, I've explained how poorly commodities have performed in recent decades. They currently trade at 1990 prices. It's crazy. But we've found a better way to own these assets...

Instead of losing money, this way of buying commodities has soared around 1,400% since 1990. Take a look...

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Believe it or not, these two commodity indexes aren't that different...

They both track a large basket of commodities. It's just that the regular commodity index – the S&P GSCI Commodity Total Return Index – is a "dumb" index.

Our other commodity index – the one that soared 1,400% – is a "smart" index.

This "smart" index strives to take advantage of situations in commodities that tend to happen over and over to produce superior returns.

In short, instead of buying and holding all commodities like a typical fund, the "smart" index only holds the commodities that history says should perform the best over the following month.

Specifically, it holds about half of the typical number of commodities based on two simple criteria...

  1. First, it owns a group of commodities with the greatest "backwardation."
  1. Next, it owns a group of the strongest commodities based on the 12-month price change.

These two criteria have proven to make real money over decades. Let me briefly explain them...

The first criterion – backwardation – is a bit complicated. It means the "smart" index specifically buys commodities that allow it to make money by "rolling" positions.

For example, say the current July oil futures contract sells for $65. And say the August contract sells for $64. This scenario leads to a profit instead of a loss when the position "rolls" forward...

The "smart" index would sell the July contract for $65 and buy the August contract for $64... which results in a GAIN of $1 per contract.

The "smart" index selects its first group of commodities based on this idea... buying the commodities with the largest backwardation available.

It selects its next group of holdings based on the strongest uptrends in commodities (using the trailing 12-month price change).

This is right up my alley. If you've read my work for any amount of time, you know I believe in following the uptrend. That's as true for commodities as it is for stocks or real estate.

We want to own what's going up, when it's going up... And the "smart" index does exactly that.

When you combine these two ideas – backwardation and following the uptrend – you end up with a "smart" commodity index. And the combination of these ideas is powerful.

This approach leads to incredible outperformance over a "dumb" commodity index... 1,400% gains compared with an index that's lost money.

Simply put, history shows that the idea behind the "smart" index works. It's the absolute best, simplest way to invest in commodities.

Importantly, a simple fund tracks this "smart" index. You can buy it in any brokerage account. It's easy.

I'll share the details of this investment TONIGHT at 8 p.m., during our live event: the 2018 Commodity Investing Summit.

This event will be a lot of fun. I'll show you why I'm so excited about commodity investing right now. And I'll also give the full details on the opportunity I described today, including the name and ticker symbol.

Be sure to tune in. You won't want to miss this.

Good investing,

Steve

P.S. We're kicking off at 8 p.m. tonight... So clear your schedule and make time. Again, you'll receive the name and ticker symbol of one of my favorite ways to invest in commodities right now... And you'll learn why I believe certain commodities could soar 500% or higher over the next few years.

Sign up to attend the 2018 Commodity Investing Summit for free, right here.

Further Reading

Steve is so excited about the next big commodities boom, he's dedicated DailyWealth this week to covering this idea. Check out the rest of his essays right here:

The Next Big Bull Market in America
You Can Buy This Asset Class at 1990 Prices
Hundreds-of-Percent Upside From the Ultimate Cyclical Asset

INSIDE TODAY'S
DailyWealth Premium

The commodities bull market is likely underway. And our commodities team believes this oil and gas company could be a major winner as the uptrend continues...

Market Notes

AMERICANS LOVE THE CLASSIC THEME PARK EXPERIENCE

Today, we highlight one of America's favorite summer obsessions...

While popular trends come and go, entertainment is always in demand. Amusement parks have become a classic American pastime, much like baseball games, music festivals, and blockbuster movies. And one company has been trending higher for years...

We're talking about Six Flags Entertainment (SIX), the world's largest regional amusement park and waterpark operator. Its theme parks appeal to families and thrill-seekers alike. More than 30 million guests flocked to its attractions last year... And that number is still growing. Six Flags noted a 27% rise in attendance for the first quarter. Not only that, but the boost helped Six Flags score record sales of $129 million – a 30% increase year over year.

As you can see, Six Flags' stock is riding higher, too. Over the past five years, its share price has doubled... And it recently hit a new all-time high. This steady growth proves that America's obsession with roller coasters and water slides is going strong...