At Chiba Taiko Partners 千葉太鼓パートナーズ when we mention commodities, we refer to raw materials that can be utilized by direct consumptions, like food items or utilized as basic items to produce other goods. These components involve sources of energy (gas and oil), natural resources (wood, wheat, corn), and precious metals (gold, silver, etc).
Investing in Commodities
There are more approaches to investing in raw materials:
- You can purchase different quantities of commodities physically, like buying gold or silver.
- You can invest by making use of future contracts of exchange trader products, which monitor a particular commodity index. You should note that the latter are quite volatile and sophisticated products that are usually appropriate exclusively for experienced traders.
- An additional method to get entry to commodity investment is via mutual funds that buy commodity-oriented stocks. For example, and oil fund would possess shares provided by corporations associated with energy, particularly oil production, supply, and trade.
Commodities VS Stock Commodities
You may be curious to know if the commodity-related shares and the actual commodities provide identical returns. Well, this is not true. As you will find out, there are periods when one investment may be better than the other. By keeping an allocation for every of these investment types, we can help you to diversify your portfolio.
Advantage of Direct Investing
Our experts have an extensive knowledge about commodity trading, so you can consider this asset type when creating your portfolio together with your Private Banker. Here are its main advantages:
- Diversification – As time passes, commodity-related shares may deliver returns that vary from other stocks and bonds. Even so, diversification doesn’t guarantee an income.
- Potential returns – specific commodity quotations may change as a result of different factors like supply/demand, forex rates, rising prices, and the general state of the global economy. Recently, their demand for commodities went up because of tremendous global infrastructure systems, which ultimately supported the commodity prices.
- Great measure against inflation – the inflation, which may deteriorate the cost of stocks and bonds, can also suggest higher commodity prices. Even if commodities demonstrated great returns during inflation times, traders must remember that this asset class may be much more volatile and involve risks.
Investing in raw materials demands particular abilities and knowledge. We can help you in diversifying your portfolio with the most relevant commodity products, but you should be aware of the risks.