An asset class that has performed consistently in the past and has given extraordinary returns during periods of extreme and unexpected inflationary episodes and strong economic growth. Commodity Market has shown persistent development globally due to rising level of demand especially from the developing countries.
Having some exposure to commodities is an indication of a well-diversified and smart portfolio. Commodities offer diversification benefits because their return characteristics are different than those of stocks and bonds. It serves as an alternative investment outlet for investors. Investors in commodities do not need to physically carry and store commodities. The commodity market can serve as a medium for investors to hedge their exposure in equity and debt markets. This is because commodities, such as precious metals, real estate, etc move in opposite direction with the traditional investment markets over a long term. They are a good source of investment even during tough times. Continue reading