buying commodities
When you go in any store or shopping centre, you are surrounded by commodities, which are traded in all countries of the world. Commodities can be safely considered as the basis for exchange activities.
Market the commodity futures sets the optimum prices. Without the existence of a futures market liquidity of these goods would be very low, therefore, raw materials and products would cost much more expensive, which is reflected, in the end, the cost of finished goods and products.
The most important commodity is oil, gas, wheat (other crops), cotton, soy beans, aluminum, copper, silver, gold, cattle, pork, sugar, coffee, cocoa, rice, wool, rubber, wood and other
It is very difficult to successfully invest in the stock market or buy the currency, not taking into account the fact that commodity prices affect the price of the shares, bonds of companies that use raw materials for the production of their goods. Almost any company that issues shares, depends on the prices for the commodity. So, the transport companies depend on prices of oil, of which receive gas, manufacturers of food directly depend on the prices of sugar, wheat, meat, soy. The producers of synthetic products depend on the price of rubber and other organic commodities, of which synthesize modern high-tech materials.
Usually in the portfolio investors a high level, you can see that the securities of the raw resources there are always present. There is an opinion, that exchange work with commodities activity is difficult, need to understand the situations to the forecast of harvests, production of natural raw materials, forecasting of consumption, and other things. However, it is necessary to take into account that investment in commodities (or derivatives) on their basis can protect funds from inflation and to give the opportunity of stable earnings. Therefore, the diversification of the portfolio, investors try to secure the share of investments in goods of this kind.
It is difficult to correctly predict the change of prices for the shares and have no idea about raw materials, which is the basis for the activities of the company.
There are companies that are not directly related to commodities - this refers to the corporations, which are engaged in innovation, developing high-tech products, materials, companies that develop Internet-sale or are introducing information technologies. In any case, the final product is directed to the buyer, which is dependent on primary commodities. For example, the rising costs of food and other consumption reduces the sale of high-tech devices, intended for personal use.
