Author Topic: Looking for a way to invest in farm commodities.  (Read 1773 times)

Offline CameronJ

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Looking for a way to invest in farm commodities.
« on: August 12, 2010, 08:03:31 PM »
I'm wanting to diversify my current IRA holdings towards something in the food sector.

I was looking at an ETF   DBA which basically invests in traditional "farm" commodities.

http://www.invescopowershares.com/products/overview.aspx?ticker=DBA

Did some research and found this article which didn't have anything good to say about agricultural ETF's sounds like the don't really follow the price fluctuations of the market.

http://seekingalpha.com/article/219613-the-problem-with-agricultural-commodity-etfs


I have a garden, a good sized pantry and I'm saving up to buy an acreage. If anyone has ideas they would like to share on IRA type investment ideas I would much appreciate it.

Offline Mr. Bill

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Re: Looking for a way to invest in farm commodities.
« Reply #1 on: August 12, 2010, 09:41:22 PM »
I owned DBA for a while.  This is from fuzzy memory, but as I recall they started getting so huge that it was difficult for them to invest without breaking SEC rules.  I don't know what their current status is.

One thing to be aware of with DBA and many other commodity ETFs: they are partnerships, not corporations.  At the end of the year you'll receive a Schedule K-1 with a bunch of financial data to be entered on your tax forms.  If the partnership earns money, you have to pay taxes on your share of the earnings annually (even if you haven't received a cent back from your investment yet).

Offline citygal

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Re: Looking for a way to invest in farm commodities.
« Reply #2 on: August 12, 2010, 09:42:18 PM »
I use DBA, COW, MOO as well as fertilizer stocks (POT etc)... works fine. The truth is, there aren't many good options to get into agriculture for long term buy & hold investors as compared to traders. As with everything, make sure you know what you're buying and what the risks are.  


Offline citygal

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Re: Looking for a way to invest in farm commodities.
« Reply #3 on: August 12, 2010, 09:58:39 PM »

Offline “Mark”

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Re: Looking for a way to invest in farm commodities.
« Reply #4 on: September 05, 2010, 08:57:30 PM »
I would look for dividend paying companies. Buying stuff that doesn't return is pure speculation. And while I agree that commodities is a good play for the next decade, you'll miss out on the snowballing of reinvested dividends.