Buy and sell raw materials and protect yourself from inflation.
If you are looking for a new investment opportunity but don’t know where to begin, try a commodity. A commodity is a basic good that is a raw material or agricultural product that can be bought or sold. This includes metals, water, energy, and food products like corn and grain.
Raw materials are a nearly sure-fire way to protect yourself against inflation. Trading commodities has a long history, much longer than stocks and bonds. The economies of ancient civilizations were based on trading materials. Today, commodities can be a great way for investors to grow their portfolio or protect themselves from inflation.
Continue reading to learn why you should be investing in commodities like water and energy. If you like what you see, Alpen Partners can be a great asset to your investment journey. Like with all investments and financial situations, Alpen Partners is equipped to assist in your journey of investing in commodities.
Investing in Commodities
Commodity investing involves putting your money into raw materials that are either consumed directly, like food, or used to create other products, like precious metals. Energy sources and natural resources like are considered commodities.
Interested investors can invest in commodities in many different ways, like in physical raw form or using future contracts of ETPs that track a commodity index. Mutual funds are also a viable way to invest in commodities. Buying shares of a company that profits from the value of a natural resource is a great way to invest in a commodity.
Commodities can be utilized for diversification, to hedge against inflation, gain returns, and more.
Commodities You Can Invest In
Water is probably the most important commodity in the world. Unlike oil, there is nothing out there that does what water can do, so there is no competition. You can’t manufacture a product to mimic it, making it one of the greatest investment opportunities in existence. Water scarcity is a theme found all over the world that involves both climate change and demographics.
Due to a growing population around the world and continued water use, and shrinking water supplies, investing in water should be on the radar of many global investors looking for a new investment opportunity.
Because water is, and will be, the most important commodity for the world in the future, companies are dedicating themselves to water purification, transportation, storing, and bottling. These sectors are becoming increasingly recognized all over the globe.
This is why water purification, desalination, and sustainability is an important and profitable business to tap into. All over the world, governments are allocating billions of dollars a year to environmental protection to clean up polluted waters. China, for example, allocated $110 billion dollars to that in its Five Year Plan. The next plan will require more to address the continuing water issues.
If you are looking for an investment that will stand the test of time, precious metals is the avenue to take. Many smart investors continue to keep gold in their portfolios.
One of the biggest uses for precious metals is for diversification. The trick to diversification is finding investments that are not correlated with one another. Investors still use precious metals to hedge their funds, as a safe haven and reducing volatility and risk. A hedge investment is one that can offset the losses in another asset class.
Gold, silver, and platinum are popular choices for the investment of precious metals.
Metals like aluminum, zinc, and copper are often used in the production of commercial and industrial products. The three aforementioned metals were on a rise of 20% at the beginning of 2018.
Like water, oil is a highly necessary commodity for sustaining human life. Because of supply and demand, gasoline prices are high and continue to rise. With growth in large countries, like China, world demand for oil sits around 100 million barrels a day.
Oil need goes beyond gasoline. Many plastics, medicines, linoleum, shingles, cosmetics, and many more products, are made from petroleum.
The energy sector is so large, making for endless opportunities to invest, ranging from oil and gas companies to renewable power providers. The size of the market is one of the biggest draws to the sector.
Another draw is the future growth of energy. The International Energy Agency predicts the sector will increase by more than 30% by 2035, thanks to growing nations like China, India, and the Middle East. These countries are set to account for two-thirds of that growth.
How to Invest
There are a few different routes to invest in commodities including futures, stocks, ETFs, and mutual and index funds. There are many commodity exchanges all over the globe, some of which carry multiple commodities, while others specialize in a single material.
Alpen Partners and Commodities
Alpen Partners Wealth Management International AG, the sister company of Alpen Partners AG, is now a registered investment advisor at the U.S. Securities and Exchange Commission (SEC). Together with our partner Swiss private banks, our company can now offer the full Swiss private banking experience to American clients, both resident and non-resident.
In terms of precious metals, Alpen Partners has connections with some of the most prestigious banks in Switzerland that have trustworthy reputations for managing wealth and some holding your gold. Connect with us if you have any questions about gold as an investment or need a bank to hold your gold.
If you wanted to explore the power of investing in water, Alpen Partners has developed an extensive network of specialists focusing on the theme of water investing. Our goal is to find the best investment opportunity for you, whether it’s in water or otherwise.
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