Sometimes new investment products are helpful; other times they chiefly tempt investors to self-defeating behavior. Barclays Bank previously pioneered two broad-based investments that track commodities indexes. These products, helpfully, let individual investors get the diversification benefits of commodities at a reasonable cost.
On Wednesday, however, the company announced eight ways to invest in narrower subgroups of commodities, including copper, natural gas, nickel, and livestock (ticker symbol "COW"). These specialized offerings may be useful for some professional traders, but I have my doubts about whether they'll turn out to be good for most individual investors. The price of individual commodities can be quite unstable. The obvious temptation is to speculate on their rise and fall. But gambling a significant portion of your retirement savings on swings in the price of cattle just isn't prudent.
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