The index commodities market is a fast paced and exciting way to invest money without the need to enter into the futures market. These are baskets of commodities that vary with the underlying performance of the commodities. Traded on exchanges, they allow investors free access to pricing and trading.

A commodity index trader moves rapidly, just like the commodity, but the risk is less because it is spread among several commodity investments. Some commodity indexes, like the CRB index, have as many as 19 commodities based on commodities that vary widely, like wheat and aluminum. Not all indexes are equally weighted and it's important to find out the underlying division of the commodities.

1. Use tracking and charting tools when your trade in the index commodities market.
2. Risk reduction in business uses commodity indexes to offset price changes.
3. Use mutual funds for investments based on commodity indexes for clients that don't want the hassle, risk or expense of investing directly.
   

Action Steps
The best contacts and resources to help you get it done

Make more money and time the investment when you use commodity charts to track investments

Every commodity index trader knows how to use the commodity pricing index to make money. Often visual charts create the best and quickest method in the fast paced world of commodities. Commodities index trading often uses the same methods of tracking as stocks.

I recommend: StockCharts.com gives up-to-the-minute information and offers a commodity channel index chart that you input information on the commodity you select. TFC Commodity Charts presents charts and quotes for commodities index trading.

Use the commodity price index to help reduce the risk of business

The index commodity market lets the investor go online to access their account. Specialized areas of commodities market indices gives businessmen advantage when they buy supplies by offering an alternative method of making money if prices on their supplies drop or raise. The same is true for farmers.

I recommend: ExpressFutures.com provides speed when you trade futures and options and lets your computer almost go right in the pit with the traders. It gives commodity indices and other valuable information. Dow Jones & Company offers single commodity indexes such as lead, tin and cocoa that trade easily.

Reduce the risk to clients and use commodity index funds

There are funds that strictly use a commodity market index approach to investing. These funds save the client a lot of unnecessary risk by spreading the investments over commodities market indices rather than directly into one commodity.

I recommend: Abacus Consulting Services offers lists of funds that contain investments from the index commodity market. OppenheimerFunds Distributor has a managed fund called Oppenheimer Commodity Strategy Total Return Fund that offers a hedge against inflation.

Tips & Tactics

Helpful advice for making the most of this Guide

• •  Use all investment tools available for clients or your business. The commodities index should be in everyone's portfolio to reduce some risks and add a hedge against market adjustments.