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Top 12 Must-Know Different Types of Investments

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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:

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  • 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

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