Commodities offer tremendous growth potential in markets that are not directly interrelated to stocks, bonds or real estate.
Commodities like crude oil, corn, soybeans, copper, cattle etc. are goods almost everyone in the world uses on a daily basis and how they respond to world events can offer valuable portfolio benefits – especially when combined with more traditional financial asset classes like stocks and bonds.
Diversification, or “don’t put all your eggs in one basket,” isn’t about the number of investments in a portfolio but rather about the relationships among those investments. In a world of increasing inflationary pressure and a falling dollar, not putting “all your eggs in one basket” makes more sense than ever before.
Commodities are recognized as one of the few asset classes that tend to benefit from rising inflation.
During unstable economic times commodity prices often rise in value.
Commodities offer a better hedge against inflation than stocks and bonds.
Focused Product Offering
With approximately 55 ‘major markets’, commodities can be much easier and less time-consuming to follow then stocks or mutual funds which number in the thousands.
Commodities allow investors to directly invest in the ‘end product’ and not into stock shares or company management.
Through the futures and options markets, commodities traders have the ability to maximize the trading power of their investment dollar. The leverage in commodities offers traders an opportunity to control a larger contract position for a fraction of the face value of the underlying commodity.
The high degree of leverage can result in substantial losses and you should carefully consider whether commodity futures is suitable for you in light of your financial condition.
Learn more about how commodities and futures can be a part of your portfolio. View our educational resources and sign-up for a free trial of MST Express for research and quotes. Or have your questions answered directly by speaking with an Main Street Trading representative–contact us or call 800-748-5083