I understand the UTMA regulations prohibit minors from directly owning equities. Do these same restrictions apply to gold, silver, oil, aluminum, steel, etc.? If not, what would you suggest to invest in, and is this strategy better than investing in such other means as mutual funds, bonds, or money market accounts? Thanks!
I'm not sure I understand your statement "UTMA regulations prohibit minors from directly owning equities". A UTMA account CAN own stocks. I suppose that technically the minor doesn't own the stock since it's the account's "trustee" (normally a parent or guardian) that has legal responsibility for the account, but the account is for the benefit of the minor and can legally only be used for things that benefit the minor (e.g. college tuition, summer camp, etc.) so for all practical purposes it's the same thing.
I don't know of any rules that prohibit ownership of things like gold and silver, though I suppose it's possible. I've never read the UTMA rules word for word and have never invested in commodities in my kids' UTMA accounts.
I personally would question the wisdom of buying into things like that now anyway. Nearly all commodities have risen dramatically in price over the last year or two. While a certain amount of that is basic supply/demand, I think a lot of it is speculation (i.e. people looking to make a quick buck buying into the latest fad investment). We've seen what happened with tech stocks about 7 years ago and real estate over the past couple years. I think there's a good chance that the same thing (a price collapse) could happen in the commodities that have run so far up in price. As soon as there's a period of declines, I suspect that many of the speculators will bail out driving prices down even more. I personally think commodities are a high risk investment at this point.
As for what the best thing to invest in, that will vary depending on how soon the money is needed, risk tolerance, etc. Over long periods of time, however, stocks have historically provided the highest returns of any asset class, so that's my preferred investment for long-term gains.