toolmeg
Joined: 09 Dec 2012
Posts: 10
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 Posted: Mon Dec 10, 2012 4:24 am Post subject: Commodity Market -Overview |
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Examples of commodities to investors are:
* Gold
* Silver
* Platinum
* Palladium
* Copper
* Oil
* Cocoa
* Coffee
* Sugar
The benefits of investing in commodities
Materials offer a good protection for investors against inflation and economic uncertainty. Gold is generally considered the ultimate safe haven in times of crisis. Strings the gold price in 2010 is still the one record to another.
Protection against inflation
When the economy is less, governments often have additional print money to stimulate the economy. Money is worth less and inflation occurs. If more money is reprinted, the amount of money invested in commodities is getting bigger. Demand for commodities is therefore greater so the price of raw materials will enter the height.
The disadvantages of investing in commodities
The downside to investing in commodities is quite a volatile commodity character, ie the values quite rapidly go up and down. The value of raw materials are therefore subject to price increases and price decreases rather giving you a short time as an investor can lose money fast.
Safety of raw materials
Commodities are a physical investment and therefore require special treatment. Raw materials must be stored in a proper way, just think of storing physical gold bars in a vault. Moreover, you also provide a robust security of your investment, thus providing cost may entail.
Drop in prices economic weakness
What materials can be an advantage if the economy picks up is again a potential downside if the economy weakens. The weaker the economy, the less will be demand for some commodities such as oil. As a result, the price of the commodities could fall earlier
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