Commodity Investment
Commodity investment gives investors exposure to markets built around essential raw materials such as gold, silver, crude oil, natural gas, copper, wheat and other agricultural products. Unlike buying shares in a company, investing in commodities means gaining exposure to the price movements of an underlying physical resource or to financial instruments linked to that resource. The route an investor chooses matters because physical commodities, commodity-backed exchange-traded products, futures contracts and other investment vehicles can have very different costs, risks and return characteristics. For investors considering commodities as part of a broader portfolio, the key question is not simply which commodity could rise in price. It is how the investment works, what drives its price, what it costs to hold and how much risk the investor can reasonably accept. Commodity investment is the practice of gaining financial exposure to raw materials and primary goods whose...