Commodities

We’ve talked about ETFs, so of course we have to also cover commodities! There are some popular ETFs that track commodities such as the price of gold, and oil.

• Commodities

  • A basic good that is traded in large volumes and easily substituted for one another.

  • Four categories: Metals, Energy, Livestock, and Agriculture.

  • Most commonly traded commodities are Oil and Gold.

• Markets

  • Considered very risky since these markets are affected heavily by unpredictable events (natural disasters, disease, weather, etc).

  • Future, options, and ETFs are some of the most popular ways to trade them.

• Why people trade commodities

  • Often run independent of typical financial markets.

  • To diversify away from traditional securities like stocks and bonds.

  • An excellent hedge against inflation.