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Who Is Investing in Commodities?
from: Caterina ChristakosThe easiest answer for this question is: anyone who does not mind being in a riskier market. In fact, the commodities market is reputed to be so volatile that fortunes can be made or lost in a matter of minutes or hours, if you don't know what you are doing. To get a better understanding of investing in the commodities market, let us take a look at some of the basics.
What is a commodity?
A commodity is anything that can be bought or sold. Examples of a commodity can include oil, gold, oranges and currency. When you invest in commodities, you are basically betting on what the market will do. You will bet that the price of oranges will rise or that the value of the dollar will fall.
Investment strategies in commodities
Most financial experts do not recommend investing anything in the commodities market that you can not afford to lose. It is not the investment type for someone who wishes for a safe investment for their retirement account, unless you put your money into a managed account.
However, if you do not mind higher risk in return for the greater chance of higher returns, commodities might be a good option. Commodities are a great way to use a portion of your portfolio in higher risk/higher return investment, but should never be used as a major segment of your portfolio.
Safe investing in commodities
If you really want to take your turn at commodities investment, but want to minimize your risk, take a look at commodities funds. Because these funds include a mixture of different commodities, the risk may be minimized by the very nature of the portfolio.
If it is riskier, why would anyone invest in commodities?
The return, when someone wins in the market, can be extremely high. There have been a number of millionaires made through commodities trading and will do so again in the future.
In addition, it has long been understood that the commodities market is a great hedge against inflation. When inflation unexpectedly hits, the commodities funds tend to do a lot better.
Finally, commodities are always in demand. Gold, oil and currency will always have a market because we need them. They will never become outdated and the demand will never disappear.
Investing in commodities may be the perfect investment for anyone who doesn't mind using a small portion of their portfolio in higher risk activities in order to achieve a higher reward. If you do not have the time to follow markets and industries on a day to day or hour to hour basis, checking out the commodities funds are the next best thing.
Caterina Christakos is an experienced investor and instructor with World Capital Institute. Ever imagined an exciting career as a stock or commodities broker. Make the dream a reality here: http://www.worldcapitalinstitute.com
Article Source: http://EzineArticles.com/?expert=Caterina_Christakos
London Commodity Exchange News
Copper weakens in futures trade on profit-booking - Economic Times
 Business Standard | Copper weakens in futures trade on profit-booking Economic Times Analysts said besides profit-booking by speculators after yesterday's gains, weak trend at the London Metal Exchange (LME) also kept pressure on the copper ... Copper in London May Pare Third Weekly Advance Before US Payrolls Data Copper steady, US data supports, jobs report seen key Ageing mines hit copper supply |
Gold Gains on Investment Purchases, May 'Struggle' for Record - BusinessWeek
 Reuters | Gold Gains on Investment Purchases, May 'Struggle' for Record BusinessWeek Gold ETFs are backed by the metal and trade like shares, allowing investors to hold the commodity without taking physical delivery. ... Gold Poised for Biggest Monthly Advance Since April on Demand |
Cocoa Advances on Higher Demand; Sugar Declines; Coffee Climbs - BusinessWeek
Cocoa Advances on Higher Demand; Sugar Declines; Coffee Climbs BusinessWeek Earlier, the commodity touched $2808, the highest level since Aug. 25. The price climbed 2 percent this week in the first gain since July. In London, cocoa ... Cocoa Advances on Higher Demand; Sugar Declines; Coffee Climbs |
Shareprices.com: Forecast-Beating US Job Data Completes Trio of Figures That ... - MarketWatch (press release)
Shareprices.com: Forecast-Beating US Job Data Completes Trio of Figures That ... MarketWatch (press release) Shareprices.com, the free website providing free up-to-the-minute share information on all FTSE 100, 250 and 350 London Stock Exchange listed companies, ... |
SMX goes live, targets 5% derivatives share in Asia - Economic Times
 AsiaOne | SMX goes live, targets 5% derivatives share in Asia Economic Times Its subsidiary — Singapore Commodity Exchange — introduced contracts in gold, rubber and coffee. Recently, SGX tied up with the London Metal Exchange to ... Singapore Futures Trading Competition Heats Up SMX debuts with limited volumes in gold, crude, dollar SMX off the blocks, focuses on getting it right |