You can potentially maximise your returns by investing in different stocks. A diverse investment portfolio may help you achieve your investment goals sooner than shares of a single company. Commodity sharing is one of the popular ways to expand your investment portfolio. You can directly purchase commodities or buy shares of that commodity.
Here is a list of top 5 commodities you can invest in 2020:
1. Gold : Gold is an ever-growing and profitable market. Even with the market fluctuations considered, the overall performance of gold is high. The rate of gold is proportional to demand. Suppose there is a high demand, the price of gold rise. As it is a precious metal, investors can buy it in the form of bars or coins. A company buys gold to increase its money reserves.
2. Crude Oil : Crude oil is a high liquidity commodity. The buying and selling of crude oil are more comfortable in the market. Although the price is wobbly given the pandemic, it might rise. As the supply is abundant for demand, the amount of crude oil is low, if the demand increases, its price may increase as well.
3. Coffee : Coffee is one of the leading trading commodities. As it is an essential item, it is in demand when the economic conditions are not favourable. To invest in coffee, you can buy contracts or derivatives.
4. Steel : Steel is an industrial commodity. The demand for steel increases when there is a need for infrastructures. Steel was off to a rough start but has recovered. It may not yield quick profits but can be an excellent option for long term investments.
5. Gasoline : Gas commodities have volatile prices. The economic slow down resulted in the collapse of gasoline stocks. Whenever the supply increases, the prices go down. Gasoline prices may rise after the economy opens up.
Stocks are at high risk as the market is highly volatile and can also give high returns. It should not stop you from expanding your portfolio. Do your research, find a good broker and invest in the commodity that meets your risk and return parameters.