The CRB Index

The CRB Index: What Commodities Can Tell Investors About Stocks

February 18th, 2009 Dr. Scott Brown No comments

by Dr. Scott Brown, Investment U Advisory Panelist
Wednesday, February 18, 2009: Issue #938

In 1933 and 1934, President Franklin D. Roosevelt was doing the same thing Obama is working to do today – reduce the corruption in our capital markets by increasing transparency and regulation.

Most investors know that the SEC and our key securities laws were enacted in those years…

Few know that in 1934, at the request of the U.S. Department of the Treasury, the Bureau of Labor Statistics began the computation of a daily commodity price index, using quotations for sensitive commodities.

The Commodities Research Bureau Index (the CRB Index) let’s you see what the commodity markets are doing, just like the S&P 500 does for stocks. Read more…

Categories: 2009 Archives, Dr. Scott Brown, Stock Tips Site Map, The Truth About Investing, Top Home Page, U.S. Economy & The Stock Market Tags: commodities, Commodities Research Bureau Index, the CRB Index

Student Question:

Could you tell us “how to start”, that is how to get enough diversification as soon as possible with say $50K ?

Dr. Scott Brown's Answer:

First of all congratulations on having enough money to have a GREAT start!

Again, I give no personal financial advice. But, in general I teach in the course that investors have to first protect themselves from themselves. This is done by allocating 70% to a core passive strategy. In my opinion the best core passive strategy is the Gone Fishing Portfolio (GFP). Then the 30% leftover can be invested in single stocks.

However, somebody completely starting out may be best off with simulated trading for the first year. During that year the entire allocation would be 100% core passive portfolio such as the GFP.