Commodities have the potential to add valuable benefits to investor portfolios, as this asset class can be used to smooth overall volatility, enhance bottom line returns, and even protect against the ravages of unexpected inflation. But understanding the risks and potential rewards of commodities as an investable asset can be a challenging task, as investing in natural resources features several nuances that are easily overlooked and often misunderstood.
A thorough understanding of what commodities are, how investors can access, and the factors that impact returns to this asset class will greatly improve the likelihood of investing success. The CommodityHQ library features a collection of educational resources, ranging from introductory to advanced, designed to help investors navigate through the world of commodities and use this asset class within their portfolio as efficiently as possible:
Commodities 101: Basics of Commodities Investing
This introductory guide covers all the basics of investing in commodities, beginning with a definition and overview of various classification systems used to segment different resources. We also touch on the various ways that investors can achieve exposure to commodities, discussing some of the pros and cons of each approach.
Commodities 201: Investment Strategies and Methodologies
This analysis explains everything commodity investors need to know about contango, including what it is and why it is important for anyone considering a futures-based investment strategy. Through a detailed example of a hypothetical natural gas ETF, this piece demonstrates how contangoed markets can impact returns experienced by commodity investors.
Commodities 301: How To Make These Assets Work For You
Investor interest in commodities has surged in recent years, the result of both a prolonged rally in natural resource prices and the development of new vehicles that facilitate access to this asset class. Specifically, the launch of a robust lineup of exchange-traded products that utilize both physical commodities and commodity futures contracts has brought commodities to the masses; they’re no longer reserved for the largest and most sophisticated investors.
Advanced Commodity Investing: Resources For Experienced Investors
Over the last several decades there have been hundreds of studies performed to analyze the merits of commodities as an asset class and the various factors that can contribute to returns. This piece highlights five of the seminal academic works that have shaped the way investors think about commodities, including those that reached both positive and negative conclusions on the benefits of utilizing commodities.
CommodityHQ Glossary of Terms
Investing in commodities can often be a complex process. The process becomes even more confusing when one considers all of the terms and specific language used to define the various commodity options available. For investors looking to educate themselves on the various nuances of the space, we offer a glossary of some of the most common terms that all commodity investors should become familiar with to enhance their trades.