Trading in commodities can be very profitable but confusing as well. Commodities can be termed as markets for physical assets. These are goods that can be bought and then later turned into other goods and services. All the hard commodities such as iron, gold, copper and coal to the soft products like pigs, apples and crude oil could all be profitable or non-profitable depending on economic trends at a certain period.
Commodities are beneficial because they are not prone to inflation. This makes them an important asset during the fluctuation of prices. You can diversify your investment strategy and reduce risks through Investing in commodities. They may get affected by factors such as demand, supply, and geopolitics. However, one thing you have to understand that you should not depend on one thing when you’re dealing with money and investment. Many experienced investors will advise you to consider different assets; for instance, one could be a forex trader as well as a metal buyer. But here is the question, what are the best commodities to invest in 2020?
Gold has always been part of the human culture since the beginning of history when it served as a means of exchange with goods. It is no longer a primary currency but there are several ways you can invest in it. Gold has always been ranked top in the most wanted commodities. This is because even when the stock market becomes chaotic, gold is known to maintain its standard. It has been trading at its highest level since 2012 to date.
You can invest in gold in many ways. It is offered by dealers in the form of coins, jewellery or bullion. The best way to purchase gold is by use of online brokers. Physical gold could be tedious in terms of storage and safety.
Investing in gold just like any other commodity been could also be risky but as long as you are prepared you can control it. Gold is can also be affected by the whims of supply and demand. On the other hand, gold prices rise when other insecurities decline which makes it an attractive asset.
If you are looking to investing for a longer period up to more than a year, then copper is the perfect commodity to invest in. Copper has much use, for instance, making motors, wiring and construction.
China is the third-largest producer for copper in the world after Peru and Chile. It accounts for almost 50% of all copper consumption globally. At this point, the prices have definitely been affected by the coronavirus outbreak. However, this is a good opportunity to invest. You can consider buying it cheap and then wait to sell when prices get better. The other reason why you should consider this a profitable investment at this time is that there is still a deficit in the market. That means demand is on a high level. For instance, it is used as a conductor by wind power generators and the sustainable energy industry is growing very first. This means that it will still be attractive.
3. Crude Oil
One of the most lucrative sectors in the stock market is energy. Crude oil is the driving force of major economies. Its demand in crude form continues to rise and hence the dominance in the market. With the world struggling to combat the coronavirus pandemic at this moment, the prices for crude oil have dropped to about 70%. Most companies such as ExxonMobil have seen their oil value crush.
While the world is struggling to combat the deadly coronavirus, the prices for crude oil have definitely dropped. Statistics estimate that it now at 70%. However, oil still holds the economy of most countries.
As renewable energy, gasoline, diesel, and other refined hydrocarbons will remain to be an essential fuel to power transportation and generate electricity. It usually refined to products such as plastics, ink, gasoline, fertilizer, asphalt and many other products. This shows that its demand is still high despite the current situation.
The plunge in oil prices has made most stocks start trading oil with massive discounts. Is an investment in the oil sector a good idea? The oil offers many profitable opportunities almost in all market conditions. However, any investor with an interest in this area has to learn the ins and outs of this sector so that they arrive at the best and most promising stocks in 2020.
Palladium is considered to be one of the metals that will offer investors opportunities in 2020. It has gained momentum since the 2008 financial crisis which was a great economic disaster. It is a valuable metal used in the chemical, automotive and electrical industries. Compared to other metals, palladium is less popular but has great monetary benefits. Because of this, it is a store of wealth and a guard against inflation.
There are many reasons why you should consider palladium for investment this year in your list for precious metals. The supplies of palladium will be tight in the coming years. Tight supply and increased demand means that there will be higher and stronger prices compared to other metals. Besides, the introduction of the palladium coin in some countries has increased its market.
Palladium is greatly versatile and safe as it usually not extremely affected by inflation.
5 . Other Base Metals
Other metals such as aluminium and zinc have major industrial and commercial applications such as construction and manufacturing. The metals are relatively stable because they are found commonly around the world. There is a rising demand for these metals which means that they would be profitable to investors
In conclusion, every intelligent investor should know that you cannot put all your eggs in one basket. The best thing to do is to diversify your portfolio for investment. This will help you achieve your specific goals as well as increasing the returns to the maximum.