Sam Tabar’s Advice on Investing in CommoditiesJanuary 21, 2015 - Author: steph - No Comments
Prominent New York City financial strategist, Sam Tabar spoke to CNBC about the importance of making smart decisions when investing in commodities. Some of you might be thinking, “uhm, yeah Steph so what?” It’s cool I was thinking the same thing about myself, like who cares about commodities right? But here’s the thing, I want to be able to travel all over the world and not have tot worry about the money thing when ever I retire. So in all actuality, knowing about this stuff now, is probably a good thing and Sam Tabar seems to be a rockstar when it comes to this stuff so keep reading.
Tabar believes that investing in commodities is not just about choosing the companies that are “hot right now.” Investors need to do their homework. By conducting research about a commodity’s past, their current agenda, and their future forecasts, investors can make better financial decisions.
Investors who are serious about getting a solid return on their investments must watch out for products that create problems. Sam Tabar is better placed than most to be able to give advice regarding poorly managed funds. He spent many years at Merrill Lynch, where he ran their Asia Pacific Capital Introduction division.
Tabar believes that by avoiding funds that are managed incorrectly, investors can give themselves a great chance of getting impressive returns. A great example of a poorly managed fund would be the United States Natural Gas Fund. When its price fell by more than 70%, the Natural Gas Fund was a huge hit for all its investors.
The Gas Fund was poorly managed. Even though demand had been increasing for shares, no plans were made to create more shares. A last gasp appeal to the SEC yielded no results, which caused a further decline in the value of UNG. Similar mismanagement issues can be found in the U.S. Oil Fund. Even though many investors look to USO as the benchmark for crude oil prices, its share price is significantly lower than that mark. Investors should look at the discrepancy between the two prices and realize that the USO is a terrible investment.
Investors who like to take short cuts or look for quick fixes will usually run into a lot of mismanagement commodity investments. This is why Sam Tabar believes that research is so important for anyone who is adding commodities to their financial portfolio.
The more effort an investor puts into researching a commodity, the more likely they are to find the right investments. Research helps create a detailed impression of a commodity. It shows investors how the commodity has performed over the past five to ten years, and what lessons can be learned for the future.
Research is the best and only way to identify commodities that may have value but are being horribly mismanaged. These commodities may rise in the future, with better supervision, but do not represent solid investments in the short or medium term.
See? This guy’s pretty up on his stuff right? For more on Sam Tabar you can just go directly to his website, samtabar.com