Commodities prices have surged since the summer – and they're only rising more quickly as the value of the dollar falls.
The greenback is declining because traders expect the Federal Reserve to pump more money into the economy next month. If the money supply expands, inflation could pick up, meaning that the dollar would buy fewer goods and services.
A slumping dollar is good for the nation's exporters; it also makes dollar-denominated commodities like gold, silver and copper less expensive for buyers overseas. Those three metals have risen sharply in the past two months; gold and silver reached all-time highs last week, and copper is trading at levels not seen since mid-2008.
How, then, can young investors buy into the commodities' price appreciation? Exchange-traded funds, or ETFs, may be one worthwhile option. ETFs act like mutual funds in that they aggregate different assets together under a single umbrella – but they're more fungible than mutual funds and can often be traded for extremely low commissions.
Large brokerages like TD Ameritrade and Charles Schwab make ETF investing easy; they can be worth checking out for the young investor who wants to diversify his portfolio beyond stocks.