Businessweek |
A commodity is some good for which there is demand, but which is supplied without qualitative differentiation across a market. It is fungible, i.e. the same no matter who produces it. Examples are petroleum, notebook paper, milk or copper. ...
People tend to gravitate towards tangible products when the world is in disarray, like precious metals, i.e. gold, platinum, etc. During normal times any good financial advisor will tell you to diversify at least 10% of your portfolio in commodities.
You may be thinking that gold and other metals are at all time highs, why would I buy now? This is why you would most likely "short" the market, which means you are betting that in a short time period the market will settle and the prices will come down. So you will be selling your shares, or metals before the market has a chance to go down. With the stuff happing in Egypt, the time is now to buy for the short term and take your profits and re-invest them into something else. Now I am no financial expert by any means, so take what you can from my advice and do your own research.
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