Weston Capital Investments

Commodities Investment

INVESTING IN COMMODITIES

When you invest in commodities, you invest in raw materials — from industrial metals, such as copper and steel, to energy, such as crude oil and etc.

Trading commodities is extremely popular because of the choice they offer and their diversity in regards to what affects their prices. Commodity trading is driven largely by supply and demand, and tend to stay stable during times of inflation and even go up when stock prices go down.

Diversify your portfolio by investing in commodities

Adding different asset classes to your portfolio, such as commodities, can help to diversify it. At Weston Capital Investments, you can indirectly invest in many types of commodities, from copper to crude oil.

A hedge against the erosion of purchasing power

Inflation reduces the ‘real’ value of a currency over time, in other words, $10 today buys you less than it did 30 years ago. Inflation in the largest economies of the world recently hit a multi-decade high, which impacts the returns of certain asset classes.

Commodity returns, more specifically Gold, have historically been positively correlated with high inflation, in other words, returns increase when there are concerns about inflation diluting the purchasing power of fiat currencies (particularly those most widely held, like the USD and EUR).

Most popular commodities

Crude Oil

Arguably the most important commodity in the world, as it is essential to modern living. Due to constant demand, availability and price have an immediate effect on the global markets and is therefore often correlated with economic momentum.

Gold

Considered a stable commodity and safe haven during times of market uncertainty. Often influenced by monetary and fiscal policies set by central banks and governments, as well as changes in supply and demand.

Silver

Has enjoyed significant popularity among commodities traders for many years. Can be used to hedge against turbulent market activity, including inflation, deflation and devaluation.

High leverage and greater diversification

If you’re an investor looking for a sustainable way to diversify your portfolio, commodity trading may be the answer, as it offers many benefits, including lower margins and an effective means of diversification.

Open an account now

Benefits of Investing in Commodities

Commodities cannot go bankrupt

Although the price of commodities can fluctuate considerably up and down on the supply and demand side, unlike a company, a commodity cannot go bankrupt. Commodity prices can drop significantly, but there will always be a certain demand for the commodity.

Raw materials are scarce

As long as the world economy continues to grow, the demand for raw materials will also continue to grow. In addition, some raw materials (for example oil, lithium or gold) are limited resources, meaning there is only a certain amount available on our planet. These raw materials cannot be replenished. In general, scarcity drives up commodity prices.

Diversifying your portfolio

By diversifying your investments, you protect yourself against the risk of losing money. Certain commodities, such as gold and silver, often do well in periods of (high) inflation. It can therefore be wise to mix some commodities into your portfolio with investment products in commodities.