- STRONG HISTORICAL PERFORMANCE
- PORTFOLIO DIVERSIFICATION
- POTENTIAL HEDGE AGAINST INFLATION AND EVENT RISK
What are Commodities?
- They are raw materials used in industrial processes, in manufacturing, as well as for consumption. As 'real assets,' commodities have an inherent value that makes them different from traditional 'financial assets.' As a result, demand for commodities is driven both by their practical use in producing goods and services and by their investment potential.
Commodities fit into three broad categories:
What are Financial Futures?
- Financial Futures make up some of the highest volume futures and options contracts and are not traditional physical commodities; they are financial futures. Money is after all the ultimate commodity. Many of the fundamentals that affect one group affect the others. Obviously, interest rates affect stock prices and currency valuations. In fact, interest rates are perhaps the most important fundamental capable of moving stock markets and currencies.
Financial Futures fit into three broad categories:
Investors considering a commodity-based investment should consider the current market environment and how this type of investment would fit within their broader investment strategy, and with any existing commodity exposure they may have.