Now the investing in commodities is not an easy thing as you need to open an account with a commodity broker as well you need to take huge risks by buying the future contacts. For a person who is just beginning to invest in the commodity market then you need to have a very good knowledge about the commodity market and the world commodity cycles and the overall knowledge about the global economy.

The best thing that you can do is to invest in the mutual finds investing in commodities. The benefit is that the mutual funds managers will be doing all the work for you and you will be able to invest the money very easily by just opening up an account with the online broker like a regular account. The benefit of this is that you need not even think about the futures contracts as well as what kind of commodities are out there.

You can invest in variety of mutual funds and the etf and here are some of them. The most common among these are type of funds is the commodity index funds and the best among the commodity index funds is the Goldman Sachs Commodity index (GSCI). The composition of this index fund is based on the twenty two different world commodities in the proportion of how they are produced. This will mean that when energy has 55% composition the agricultural has about 25% in the composition. This index is widely tracked and a lot of mutual funds even track this index to invest in the commodities

In most cases when the stocks go down the commodity prices go up and you can get good returns in the commodity markets. That is why a lot of people invest in the commodity market mutual fund to help diversify their income and risk.

Oppenheimer Real Asset Fund

PIMCO Commodity Real Return Strategy

Goldman Sachs Commodities Index

Deutsche Bank Liquid Commodities Index

Rogers International Commodities Index

Dow Jones AIG Commodities Index

Now you can select the commodities that you want to invest in yourself and that will mean that you can have the basket of commodities earmarked and you can invest in specific mutual funds of these like the gold mutual funds or the precious metal mutual funds or even the industrial metal mutual funds. Then you can invest in the mutual fund which are specifically there for agricultural produce or the oil or natural gas.

The most common among the agricultural sectors is the PowerShares DB Agriculture or the Elements Rogers International Commodity Agriculture index or the iPath Dow Jones-AIG Grains index.

Another very good mutual fund is the Vanguard Precious Metals and Mining fund.

I would suggest that it is better to use the mutual fund and the ETF route to invest in commodities as opposed to investing in the commodities directly and lose a high amount of money.