a World of Commodities
Commodities are the world’s raw materials. As natural resources, they are used in the production process of all manufactured goods, which places them at the heart of the economic cycle. Their vital role in the world economy, combined with the specific characteristics of commodity markets, make this an important asset that can maintain or increase its value in times of uncertainty or financial turmoil.
Historically, commodities like precious metals have always been valued by people as important possessions. Today, individuals are increasingly keen to own commodities mostly due to the following reasons:
- Commodities offer diversification
- Holding real assets offer some protection from inflation
- Potential price appreciation can lead to substantial profit
Because of its preeminent role in the global economy, oil makes for a great asset to hold. However, the oil industry is a multidimensional and complex, with many players that often have conflicting interests.Proceeding with caution and making sure that you understand the market fundamentals and potential risks is essential for success.