Top 12 Must-Know Different Types of Investments
10. Commodities
Definition: Commodities include raw materials like oil, gold, silver, and agricultural products. Investors can trade commodities through futures contracts, ETFs, or commodity-focused mutual funds.
Pros:
- Hedge against inflation and currency risk
- Diversifies portfolio away from traditional assets like stocks
- Potential for high returns during commodity booms
- Globally traded, offering market access
Cons:
- High price volatility
- Requires specialized knowledge
- Storage and transportation costs for physical commodities
- Risk of losing money if demand falls sharply
Click NEXT PAGE to learn more…