Investors who wish to diversify their investment portfolio outside of stocks and bonds often turn to commodities. Goldman Sachs, in a recent note, stated that investors should buy commodities as recession outside of Europe appears unlikely over the next year. So, can one confidently invest in commodities now? Read on to find out.
As with stocks and bonds, commodities are also subject to volatility. This offers investors the opportunity to make profits by dealing in commodities. People often talk about commodities as if they are one single product, which is not the case - they consist of dozens of different products. The price of each commodity moves according to reasons affecting its own specific supply and demand factors. Commodities such as precious metals, energy products, mining products, and agricultural products are regularly traded in the open market, thereby offering investors one more asset class with which to diversify their investments.
How to invest in commodities?
Similar to equity and bonds, you can invest in commodities either by taking physical delivery or by entering into future contracts. Yo...