Under this blog we are describing how to invest in commodity market?
How to invest in commodity?
The main benefit of investing in commodity is that they are very lowly correlated with other asset classes. They thus fit within the asset allocation Modern Portfolio. This suggests that in order to maximize your returns while minimizing risk, you should try to develop a portfolio with assets that are minimally correlated with one another - should one asset class fail in a financial crisis, another asset class would thus remain a stalwart that would protect your portfolio.
Benefits of Commodity Trading:-
The commodity markets are seen as a great way to be able to guard against inflation as the prices of the basic commodity tips go up and push up the inflation index so is the case with the commodity mutual funds pricing. This is the kind of number game that can be really beneficial to the investor.
Basic Terms related to Commodity Investments :-
Spot Price of a Commodity: The spot price of a commodity is the price that the commodity is selling for today.
Futures Price of a Commodity: Futures are derivatives - that is, they derive their value from the value of an underlying asset. A futures price of a commodity is a contract for delivery of a set amount of the commodity at a specific time in the future. As it is not practical to trade physical commodities, most people instead trade futures contracts.
Commodity Futures Contracts: These are agreements to buy or sell a fixed amount of a commodity at a fixed date in the future and at a fixed price.
What are the negatives of commodity investing?
1. Individual commodity is volatile and risky. For this reason commodities should represent only a small portion (15% or less) of most investor portfolios. We recommend a diversified basket approach to investing in commodity.
2. Investing in certain individual commodity can be difficult and complicated for many investors.
3. Commodity investments don't pay interest or dividends to investors.
Equity Research Lab (ERL) offers new modern investment way and new options with low risk There are very well established investment solutions. If you want to more information regarding the ERL investment tips like Equity Tips, Commodity tips, stock cash tips, Intraday tips, MCX trading tips, option trading tips
How to invest in commodity?
The main benefit of investing in commodity is that they are very lowly correlated with other asset classes. They thus fit within the asset allocation Modern Portfolio. This suggests that in order to maximize your returns while minimizing risk, you should try to develop a portfolio with assets that are minimally correlated with one another - should one asset class fail in a financial crisis, another asset class would thus remain a stalwart that would protect your portfolio.
Benefits of Commodity Trading:-
The commodity markets are seen as a great way to be able to guard against inflation as the prices of the basic commodity tips go up and push up the inflation index so is the case with the commodity mutual funds pricing. This is the kind of number game that can be really beneficial to the investor.
Basic Terms related to Commodity Investments :-
Spot Price of a Commodity: The spot price of a commodity is the price that the commodity is selling for today.
Futures Price of a Commodity: Futures are derivatives - that is, they derive their value from the value of an underlying asset. A futures price of a commodity is a contract for delivery of a set amount of the commodity at a specific time in the future. As it is not practical to trade physical commodities, most people instead trade futures contracts.
Commodity Futures Contracts: These are agreements to buy or sell a fixed amount of a commodity at a fixed date in the future and at a fixed price.
What are the negatives of commodity investing?
1. Individual commodity is volatile and risky. For this reason commodities should represent only a small portion (15% or less) of most investor portfolios. We recommend a diversified basket approach to investing in commodity.
2. Investing in certain individual commodity can be difficult and complicated for many investors.
3. Commodity investments don't pay interest or dividends to investors.
Equity Research Lab (ERL) offers new modern investment way and new options with low risk There are very well established investment solutions. If you want to more information regarding the ERL investment tips like Equity Tips, Commodity tips, stock cash tips, Intraday tips, MCX trading tips, option trading tips
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