Diversifying your stock portfolio can help you maximize your return potential. Diverse investment portfolios can help you reach your investment goals faster than single-company shares. Commodity Sharing is one way to increase your investment portfolio. You can either directly buy commodities or purchase shares in that commodity.
Here's a list with the top five commodities that you can invest in 2020.
1. Gold: Gold is a profitable and growing market. Even taking into account market fluctuations, gold's overall performance is excellent. Demand determines the rate at which gold moves. If there is high demand for gold, it will rise in price. Investors can purchase it as bars or coins, since it is a precious metal. To increase its money reserves, a company might buy gold.
2. Crude Oil: Crude oil has high liquidity. Crude oil is more easily traded on the market than it is to buy and sell. Despite the fact that the price of crude oil is low due to the pandemic, it could rise. Because crude oil supplies are plentiful, their price is likely to rise if demand grows.
3. Coffee: Coffee is one the most traded commodities. Because it is an indispensable item, it is always in high demand even when economic conditions are not favorable. You can purchase derivatives or contracts to invest in coffee.
4. Steel: Steel is an industrial commodity. When infrastructure is needed, steel demand increases. Steel had a difficult start, but has since rebounded. Although it may not produce immediate profits, it can make excellent long-term investments.
5. Petroleum: Gas commodities are subject to volatile prices. Gasoline stocks collapsed due to economic slowdown. Prices fall when there is more supply. After the economy expands, gas prices could rise.
Stocks can be high-risk because the market is volatile and can give high returns. This should not prevent you from growing your portfolio. Do your research and find a broker who can help you invest in the right commodity for your return and risk parameters.