If you are interested in investing your money and diversify your portfolio over time then commodity investment is something that you should be going for. Commodities are things such as metal, petroleum, grains, or any other thing that carries a market value can be termed as a commodity, and people buy and sell these all the time. The trick is that you buy a commodity when it is being sold cheap and then you chip it in and get back your investment when the prices become a little more favorable. Same as gold, as it is also a commodity that provides protection against inflation and serves as a strong and secure form of investment.
You might have seen or heard about people who Sell Gold Bars, they have been holding onto these for some time and when the prices have surged or they can see a positive percentage on the returns they sell these off. Are you excited about investing in commodities yet? If not then the following reasons might serve as inspiration for doing so;
1. Hedge against inflation
Market trade and its turns as up and down are something that a beginner might not be able to comprehend to but if you are a professional and has been in the game of investing for some time then you are well acquainted with all the terms and notions that are thrown every now and then. The market is fast means the inflation is rising so people are investing in commodities to secure their investment and when the market is slow that means not so much investing is taking place and so on so.
If you want to turn your investment into something that bears profit and proves as a hedge against inflation then investing in commodities is something that you need to do right now. When inflation is at its peak you can just sell off your commodities and earn a handsome profit at hand.
2. Commodities can diversity equity risk
Owning equity over something means that you either own a partial or a whole of something that still has liabilities and debts attached to it. You will be able to unlock the profit from your equity once those losses and debts are accounted for. That is why most of the investors pitch in some of their investment into owning commodities as the losses proposed by owning equity are outnumbered by the profits introduced by selling of the commodities.
Both the equity and commodities have a positive correlation with each other but it can also be a negative one if a market crisis hit hard such as of the year 2008-2009. A casual example would be that you can outweigh the losses proposed by selling a piece of equity if you go for a commodity that has been in holding for some time such as if you Sell Platinum to account for those losses.
3. Risk-adjusted returns
You can rest assure that you will be able to make some handsome profit now and then by selling commodities that you have been holding onto even if at present these don’t propose a solid return. If so then you can just sell them at some point in the future when the prices are more lucrative so at the end of the day you get more risk-adjusted returns that are lucrative and help you to diversify your investment strategy.