Take your 401(k), traditional and Roth IRA to a new level – self managed retirement funds creating mega millions that will retire before 55
Sam Adelton
Jul. 6, 2007

It is very important to understand that stock market and real estate market were the heroes of investment in the last seventy years. The commodities are the new heroes for the next seventy years.

Many smart individuals are taking their retirement fund out of managed environments to a self-managed one. Investing in commodities with proper hedge in place can create much more return than stocks, bond, and real estate can ever generate.

Investing is an equation risk reward. It is also a function of money management. Most investors try to self manage their funds and lose because they scared when the market drops and after they exist the market takes off.

Investing in commodities involves a few things. Commodities move in cycles as a complex function of supply and demand. The interaction of supply and demand sets the price. You cannot see what’s coming next moment. You do not know who is bidding and who is selling. But you know very well what the overall trend is. The buyers and sellers react in the market from panic. That causes volatility. You must learn to take advantage of a volatile bottom and sharp spiky top.

You must learn to think opposite of a trend. Always keep the major direction of the market in you mind. Let us take an example. Cotton is in a new bull market. Technical indicators point to at least 25% gain in cotton prices over the next year. That does not mean you can go and buy some cotton futures. The reason is that of these futures test a base in 60, you can get wiped out. For every cotton contract, you control $30,000 of cotton. If cotton goes down by 1%, you lose $300. That is why you should hedge with options. Sell an in the money call option and buy a distant put option to protect yourself. You know cotton will go up 25% in the eighteen months. That will fetch you $7500 profit. But you can invest $1500 of that in hedging. If cotton first dips 5% and they take off for 30%, you will make close to 500% on your margin money.

Who said you cannot retire before 55? It is possible – it is happening.

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