Chicago Mercantile Exchange (CME) or “Chicago Butter and Egg Board”
Commodities Trading: An Overview
Commodities are an important aspect of most American’s daily life. A commodity is a basic good used in commerce that is interchangeable with other goods of the same type. Traditional examples of commodities include grains, gold, beef, oil, and natural gas.
For investors, commodities can be an important way to diversify their portfolio beyond traditional securities. Because the prices of commodities tend to move in opposition to stocks, some investors also rely on commodities during periods of market volatility.
In the past, commodities trading required significant amounts of time, money, and expertise, and was primarily limited to professional traders. Today, there are more options for participating in the commodity markets.
KEY TAKEAWAYS
- Commodities that are traded are typically sorted into four categories broad categories: metal, energy, livestock and meat, and agricultural.
- For investors, commodities can be an important way to diversify their portfolio beyond traditional securities.
- In the most basic sense, commodities are known to be risky investment propositions because their market (supply and demand) is impacted by uncertainties that are difficult or impossible to predict, such as unusual weather patterns, epidemics, and disasters both natural and man-made.
- There are a number of ways to invest in commodities, such as futures contracts, options, and exchange-traded funds (ETFs).
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SBI Loan against Sovereign Gold Bonds
A gold loan is a quick way to raise funds in times of need. In an earlier post, we had discussed gold loan products from the State Bank of India. With such gold loan products, you can take a loan against physical gold and jewellery. However, purchasing physical gold and gold jewellery is not the only way of owning gold. As an investor, you can also take exposure to gold by way of Gold Mutual funds, Gold ETFs and Sovereign gold bonds too. Is there a way through which you can monetize these gold investments while continuing to retain ownership these investments? To put it simply, can you take a loan against these gold investments? Yes, you can.
In this post, let’s look at a loan product from the State Bank of India where you can pledge your Sovereign Gold bonds to get a loan. Please understand this loan product is only for loan against Sovereign Gold Bonds (and not gold mutual funds or gold ETFs). Before, we dig deeper into the loan offering, let’s first look at the basics of Sovereign Gold Bonds.
How the Modern Stock Market is Affected by War
A look at investor attitudes to war and uncertainty in the modern era.
Coming up on the 75th anniversary of the end of World War II, the world is now focused on the possibility of an armed conflict between the U.S., its allies and Iran. So far the U.S. has spent an estimated $6.4 trillion on wars post 9/11, and going by the president’s latest tweets, it appears willing to keep spending if things escalate. But there is little clarity of how far Iran, its economy already struggling and its leadership deeply unpopular, is willing to go to avenge the death of its top general.
Security experts are weighing in, and only time will tell, but investing experts are sending out reminders that past wars didn’t push U.S. equities lower long-term.
LPL Financial said in a note that stocks have largely shrugged off past geopolitical conflicts. “As serious as this escalation is, previous experiences have indicated it may be unlikely to have a material impact on U.S. economic fundamentals or corporate profits,” said LPL Financial Chief Investment Strategist John Lynch. “We would not be sellers of stocks into weakness related to this event, given stocks have weathered heightened geopolitical tensions in the past.”
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