Investing in Futures & Commodities
Futures and
commodities investments provide investors with more intricate financial
requirements a means to hopefully gain from both the upward and downward
movement of commodity and
financial markets.
Basics of Futures & Commodities Investing
Futures and
commodities speculators can benefit from greatly leveraged exposures in both
financial and non-financial markets (commodities such as energies, meats,
metals and grains). Hence, they can buy futures contracts by depositing even a
little portion of the total contract price. Their aim is to gain from movements
in the value of the futures contract.
Hedgers, those who
hold a particular commodity (asset) or have a definite investment (such as
energy cost), frequently choose a position opposite of the cash market to help
lessen the risk of falling or rising commodity prices.
Risk of Investing in Futures & Commodities
Since futures and
commodities markets can be extremely volatile, repeatedly fluctuating
significantly, investing in them is not applicable for all investors. You could
lose all your investment and in certain instances, even more than that.
Moreover, you may at times encounter difficulty in liquidating your futures
contracts, which limits your use of cash.
Before Investing, consider the following:
• Financial Resources
• Investment
Objectives
• Financial Track
Record
• Risk Capacity
Commodities at Bellemore
Group
If you want to know
more about the benefits of investments in futures and commodities, get in touch
with your financial advisor. Both of you can consider the advantages and
disadvantages of this type of investment and whether it is suitable to your
particular circumstances and that it is within your risk level.
If futures and
commodities investment satisfies your investment objectives but your financial
counselor does not trade in these assets, he or she will refer you to another
investment advisor who can assist you invest in this highly specialized market.