Top 3 Commodities to invest in 2020 (In Corona virus Pandemic)
Hello Guys. We know this is one of the worst time recorded for any Investor. All the investing vehicle like Stocks, Bonds, Mutual Funds And many more has been affected by the corona virus pandemic.
- As we all know the basic fundamental of getting profits and eliminating loss is not to put all eggs in one basket means we should diversify our investment as it would cut the risk of money loss and maximize the possibilities of returns.
- If we want to have the least effect of the market turbulence, we must put our cash into different assets rather than one, for example let’s say not to invest only in stocks or only in real state but to diversify our investment.
- As Other investment vehicle, Commodities are also one of the best investment vehicle to invest in this covid19 pandemic. However, like other financial markets, commodities are also badly affected by the pandemic. In that type of environment, it becomes more difficult to find the correct commodity to invest in to have the best possible returns.
- To make it easier for you, we have done the comprehensive research over which commodity we should invest in or why.
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I know the first thing that comes into your mind is what is commodity?
- Commodity is the basic good that can be interchanged with other goods of the same type. Commodities are basically used as raw input in the production of other goods and services.
What is a commodity marketplace?
A commodity market is a physical or virtual marketplace for buying, selling, and trading raw or primary products. There are currently about 50 major commodity markets worldwide that enable trade in approximately 100 primary commodities.
Commodities are divided into two types: hard and soft commodities. Hard commodities are natural resources that are mined or extracted—such as gold, rubber, and oil, whereas soft commodities are agricultural products or livestock—such as corn, wheat, coffee, sugar, soybeans, and pork.
The top commodities in which we can invest in 2020 are :
1) Crude Oil: If you think that crude oil is only used as petroleum to run vehicles then my friend you are mistaken. crude oil is refined into many different products including the gasoline we use to fuel our vehicles. But it goes beyond just gas. Products made from petroleum include plastics, medicines, linoleum, shingles, ink, cosmetics, synthetic fibers, solvents, fertilizer, asphalt and thousands of others. Thus, the demand for this commodity will always exist.
• Crude oil has been marked as the best commodity to trade in 2020 has been currently seen in low valuation. However the first and the best strategy of an investor is to buy low and sell high.
• As the pandemic which has put entire world in lockdown forcing people to stay at home will over, Usage of oil will increase resulting in boost of its price.
2) Gold: Gold is used in jewellery, technology, by central banks, and investors paving the way to its market at different times within the global economy.
• Gold could be the best commodity to invest in right now in such a pandemic situation because gold has played a great role for the betterment of the global economy.
• During the time of crisis, Investors have always looked up to that type of assets which has high intrinsic value to safeguard their money and ensure that they would not loose wealth in market crash and recession. Gold is predicted to increase in value over the coming months making it one of the best commodity to invest In 2020.
3) Copper: If you are looking for another amazing commodity to buy at the moment, then copper must be in your list. Copper is such an amazing commodity which is widely used in day to day life in various way such as Utensils, different electrical and non-electrical machines. It is also widely used as copper wire.
• Decline in global manufacturing sector due to the covid19 pandemic results in decline of the price of the copper. But the demand of the metal will increase as the pandemic will be over resulting in increment of the price.
Note: There are also some other precious commodities which deserves to have a look. These are precious metal such as platinum, palladium, silver, lithium and cotton, food products like coffee, corn, oats, wheat, soybeans, sugar and many more.
How To Pick The Best Commodity To Invest In 2020 ?
- While choosing a commodity now, we have a lot of questions flashing in our brain Such as Is this now the correct time to invest? In Such a market which is too unstable and uncertain. However, we should always remember that there will be a bright day after a dark night. The Commodities which have the low valuation might have increment in future. The only thing it need is the opportunist who can look beyond the short term implication of the corona virus.
While Deciding to invest in commodities, Renowned investor Jim Rogers suggests the key question to ask :
1) What is the current level of world production?
2) What new supply sources are currently coming online?
3) Are there potential supplies that are undergoing exploration?
Disclaimer: Before making any investment decisions do your own deep research and also consult with an experienced broker.
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