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Investing in Commodities

For most investors, money goes into savings, shares and property. Commodities provides another option, investing in gold, oil, copper and many other things. If you believe that demand will outstrip supply, in the long term, then these may make a good investment. For most people the practical way to invest is in companies and their shares rather than directly, for example in gold mines rather than gold itself.
In recent years, the weakness of the dollar has pushed more investment towards commodities, especially gold, silver, platinum and palladium.  Gold of course is underpinned by demand for jewellery, and its history as a 'safe haven', and platinum is underpinned by industrial demand, for example in car catalytic converters.  As a result, they have increased in value faster than silver and palladium, at least so far....
If you want to buy mining shares, then some options related to platinum are: Lonmin, Anglo Platinum, and Impala Platinum.
If you want to invest in a way that links directly to the commodity price, than look at Exchange Traded Funds (ETFs).  'ETF Securities' offers a range of funds linked to gold, silver or other metals.  the 'Physical Platinum' , 'Physical Palladium', and 'Physical Precious Metal Basket' ETFs are also listed on the London Stock Exchange.
Finally, you can of course invest in precious metal directly, by buying gold coins like the Krugerrand, but this is only worthwhile if you keep buying and selling costs low.


 

Some useful links:

Book on investing in commodities   Book on Commodities
Money Week website on investing in commodities   'Money Week' on Commodities
BBC on investing in gold   BBC on Investing in Gold


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