What are Commodities?
Section 27 Module 6
Note: The typical rates of return quoted above are average rates of return over a 8-10 year investment period.
Commodities
- Commodities include Gold, Silver, Food items, and other things like petroleum products, that are used everyday.
- Commodity investments are not capital protected.
- An investment in commodities such as Gold, and Silver cannot provide an income, they can only provide capital gains or loss.
- The value of commodities is greatly affected by economic conditions, demand and supply, and political instability.
- People mostly invest in Gold and Silver as an Emergency Fund.
- Managing and securing commodity investments like Gold and Silver physically is a headache and expensive.
Remember - Commodities like Gold and Silver, are mainly used a hedge against inflation - meaning, their value goes up as value of currency falls.