Commodities are natural resources that are grown or extracted worldwide. They play a role in all production processes and therefore form the backbone of the global economy. Consumers and manufacturers find each other on the commodities market, on which they buy and sell.
The market mechanism and therefore commodity prices are driven by supply and demand (and the associated uncertainties). Each commodity has its own clearly-defined market. For instance, supply and demand are very different for wheat and crude oil, which means that the correlation between the various commodities is generally low. Due to this important role and the specific characteristics of the commodity markets, commodities are an investment category that can add real value to your securities portfolio.
Precious metals are pure metal elements. They are used in aviation and space travel, medical technology and mobile telephones and laptops, for example. If you wish to invest in precious metals, you can invest in gold, silver and platinum. The actual value depends on the price and exchange rate at which the precious metal is listed. When the economy is weaker or (geo)political risks become more significant, investors often resort to gold as a so-called 'safe haven'.
There are four ways to invest in gold:Below we have briefly summarized the main risks of indirectly investing in real estate:
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