The Handbook of Commodity Investing by Frank Fabozzi

The Handbook of Commodity Investing is quite an extensive book on the fundamentals of the commodity markets and the logic of investing in commodities with a long-term view. This is not a book that uncovers the latest technical trading methods, but it will teach you almost everything you need to know about commodity investing.

The Handbook of Commodity Investing was released in mid-2008, so it includes the super-cycle bull market that commodities have been in for several years. The authors discuss how there are sustained periods of above average returns, which are followed by prolonged periods of depressed prices. However, you will realize the benefits of including commodities in your portfolio to increase your long-term gains.

I like the fact that this book is more of an academic piece, whereas many of the recent books on commodities are just jumping on the commodities bandwagon capitalizing on the bull market. The Handbook of Commodity Investing cites an exhaustive list of sources in its research, as you would expect from a book written by a number of respected professors.

First, you will learn the benefits of investing in commodities through the extensive research presented in the book. Secondly, once you are convinced that commodities may be right for you, it is time to learn how you can invest in this asset class.

The Handbook of Commodity Investing presents many different investment vehicles you can use to invest in commodities – pros and cons. They include futures, futures options, commodity ETFs, commodity trading advisors (CTAs) and hedge funds.

Interestingly, most of the book covers the fundamental aspect of commodities, but there is also a section devoted to using technical analysis as an investment tool. From my experience, most in the academic world are not fond technical analysis. However, this section just states the facts and they conclude that professional money managers have achieved above average returns using technical analysis.

One of the most beneficial sections in the book is the section on the fundamentals of specific commodities and it spans more than 100 pages. Anyone interested in commodities as an investment and just wants the pure facts (no hype) should find The Handbook of Commodity Investing very beneficial.