Commodity Advisors

Hiring a full service commodity broker can benefit anyone considering trading in consumable goods. Commodities are a good investment, but most novice investors need the expertise of experienced commodity trading advisors to educate them about the intricacies of markets and how to properly manage accounts. The casual investor usually has no idea about which goods are most profitable or about factors which affect net gains and losses, such as seasonal and economic fluctuations. Commodities are consumable, transportable goods such as grain, fuel, metals, food products, and meats used worldwide by a global population. While commodities are global, in the United States, futures, or commodity contracts, are traded at exchanges, such as the Chicago Board of Trade, the Commodity Exchange Group, and the more well known New York Board of Trade. Anyone who has watched New York Stock Exchange brokers hurriedly pacing the NYSE floor with pad and pencil in hand has witnessed traders feverishly calling out bids for wheat, soybean, crude oil, or sugar on behalf of clients as prices quickly rise and fall.

In the last twenty-five years, commodities have expanded to include financial derivatives based on bonds, securities, and domestic and foreign currencies. And there is a lot of money to be made, especially with traditionally hot commodities like gold, livestock, grains and financials. Market profitability is determined largely by national and international supply and demand. When goods are in short supply, demand increases and prices rise, causing a profit for suppliers and investors. But the average speculator lacks sufficient information to determine when commodities will fare well and when they will not. Commodity trading advisors are adept at forecasting profitability, based on years of experience looking at seasonal and global economic trends. A good broker is one who is zealous, trustworthy, and knowledgeable enough to make money for the client and achieve profits. In the Bible, Matthew, Chapter 25 extols the virtues of industrious servants entrusted with sums of money to trade and realize a gain on the open market: "Then he that had received the five talents went and traded with the same, and made them other five talents. And likewise he that had received two, he also gained other two" (Matthew 25:16-17). Surprisingly, in today's money market, five talents would be worth a whopping two million dollars and two talents would have brought a net gain of around $800,000! That's the kind of negotiator most any investor would love to have.

A full service commodity broker is not only familiar with short- and long-term market trends for commodities and futures, but he or she can prevent novice traders from becoming overzealous and unrealistic in expectations of returns. Knowledgeable commodity trading advisors can help investors develop and adhere to an effective investment plan, diversify portfolio holdings by placing money in different kinds of markets, and provide regular updates on performances. Brokers not only advise, but a good full service commodity broker is also an educator. Seasoned commodity trading advisors will want clients to gain information about options and futures markets, while retaining a level of dependency and fostering a long-term relationship built on mutual trust. Brokers usually have power of attorney and the client's permission to act on their behalf and buy or sell options or futures with the client's money. After all, the commodities broker works on a commission basis, a percentage of each trade; and when the client makes money, so does the broker. Establishing a good partnership is crucial to making money in commodities and futures trading. Without it, clients are just risking losing hard earned capital recklessly chasing elusive gains without the benefit of reliable and reputable counsel.

An ethical and trustworthy broker will provides expertise and enthusiastic counsel to ensure that clients make money on worthwhile commodities trading ventures. Brokers will spend considerable time researching domestic and international markets for trading opportunities, developing strategic money management and investing plans, projecting and speculating market profitability, and most importantly, regularly communicating with clients to keep them abreast of changes in portfolio activity. In turn, clients should respect the professional judgment of advisors and brokers and be consistent and timely in paying commissions and fees.

The best way to find a good trading advisor or full service commodity broker is to browse the Internet. Broker and advisor websites provide contact information for individuals and firms that specialize in counseling, buying and selling for prospective investors. In the United States, qualified, reputable brokers and counselors should be licensed and registered as a futures commission merchant or enterprise, an introducing broker, a trading advisor, or a commodity pool operator in order to buy or sell commodities for individuals or a group of investors. Registration with the Commodity Futures Trading Commission (CFTC) and membership in the National Futures Association (NFA) is also required for full service brokers and advisors.

Investors may opt to employ the services of an online commodity trading advisor via the Internet, versus a full service commodity broker. Online commissions will not be as high as those charged by face-to-face brokers; but it will be highly unlikely that an online advisor will offer the individual attention provided by full service traders. Investors would be wise to do background checks on any prospective agent and try to ascertain a track record of trading successes. It may be difficult to reference a broker's history of past account performances; however most should be willing to furnish a list of client references. Word of mouth is the best advertising for potential advisors and brokers. Consult with personal financial planners, bankers, mutual funds and other money management agencies for recommendations or referrals. Successful brokers will have a following of satisfied clients and a reputation for brokering the best deals in the hottest commodity and futures markets. Brokers are entrusted with investor monies and confidence, neither of which is easily replaced. Dissatisfied investors should not waste time, money or trust on unscrupulous traders who squander capital and miss opportunities to achieve profits.