| Commodities |
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| Why commodities…. |
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| Investing in commodities ,is the buzzword in the markets right now ,with good reasons. |
 commodity prices fluctuate with basic supply and demand. |
| commodity price cannot remain at low prices or high prices there is a cycle of supply and demand. |
| factors irrelevant to the supply and demand wont have an impact in the prices, |
| far more easily predictable than any other form of investment. |
| commodities are used in a day to day basis so all the factors that influence the prices are readily made known. |
| no single investors or group can influence commodity prices it’s a global market with high liquidity and maximum participants. |
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| The argument for investing in commodities is that they not only provide access to potential equity-like returns, but also provide strong diversification. It is clear that commodity markets behave differently to those of bonds and equities. For investors with large bond and equity holdings, commodities are an important diversifying agent that may help to reduce the risk profile of the portfolio as a whole. |
| Commodities also potentially provide a good hedge or diversifier in periods of turmoil such as natural disasters or wars, in addition to offering an attractive source of return. Unlike traditional asset classes, commodities are not adversely affected by inflationary pressures and generally enjoy a positive relationship with inflation. It is often the case that shocks to equity or bond markets cause these to move in opposite directions to commodities. |
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