Shortly after the first quarter of 2022, Pew Research concluded that inflation was the number one concern for most Americans.
As a result, it’s now more important than ever to start protecting yourself against inflation. You need to own assets that can store your wealth and increase your cash flow.
The best option is to consider investing in commodities. This guide will list some of the best commodities to invest in regardless of your current financial situation.
Here’s what you should know about commodities investing:
Invest In Funds
One of the easiest ways of investing in commodities is to put your money in a fund.
This is when you invest in a company that owns several commodities or invests in commodities. For example, let’s suppose you want to invest in gold bullion.
You might not have the money or even the space to hold lots of gold. The fastest way is to put your money in a fund that does. This helps you own, by proxy, gold bullion. As the price of gold goes up, you can sell your shares for a profit.
When it comes to funds, the best commodities are often precious metals, oil, and technology. Make sure you research the current market trends and always consult your financial advisor first.
Now let’s look deeper into some of the commodities to invest in. Even if you opt for investing in funds, it’s always best to own as much physical bullion as you can.
When it comes to precious metals gold and silver bullion are the ideal options. Both serve their individual purposes and you must understand these differences to decide your investment approach.
Gold is often used as a store of value. You buy gold to use as a form of currency. For example, let’s say you need to spend $1,000 to buy goods. Let’s also presume that the current price of 1 troy ounce of gold bullion is also $1,000.
You can use the 1 troy ounce gold bullion round rather than cash. Gold has always been a form of currency. During inflationary times, it becomes the preferred method when cash becomes weaker.
Silver can get used as a form of currency as well. It can also be sold for a profit. While gold bullion is also sold for profit, silver has many more industrial uses. For example, the battery in your laptop or smartphone is made partially using silver bullion.
Often, investors will stock up on silver to use as currency and sell when they need extra cash. Silver is also cheaper than gold and can also be exchanged for eventually buying the latter.
This is a lesser-known commodity and is often ignored even by seasoned investors. The reason is that you’ll need to own lots of copper bullion to sell it.
A small stack of copper rounds won’t be sufficient. But if you’re willing to accumulate several hundred rounds, you might be able to sell them for a profit.
Copper is a base metal that has many industrial uses. As more nations develop, the demand for copper also increases. However, it’s not as scarce as precious metals so you’ll have a lot of competition.
The advantage of copper, however, is that it’s a lot cheaper. You can spend, on average, $10 to $20 per pound of copper bullion. If you’re getting started with investing in commodities, then copper should be on top of your list.
You probably weren’t thinking of this or perhaps you were hoping to avoid it altogether!
When times get tough, violence can occur and this is when many people frantically stock up on weapons to protect themselves. Ammo is one of the most useful commodities to own during a financial crisis.
Often you want to invest in a diverse range of ammunition. This could include bullets for handguns, rifle rounds, and shotgun shells. One hopes that violence will be avoided but ammo is still one of the best commodities to invest in.
While many currencies are weakening due to inflation, there are still many that hold their weight.
One of the best commodities to invest in during an inflationary period is foreign currency. This is something that everyday citizens have had to do throughout the ages.
During hyperinflation in Yugoslavia, the people exchanged their Dinars for Deutschmarks. Even in present-day Serbia, Dinars are exchanged for stronger currencies such as Euros, Dollars, Swiss Francs, and Pound Sterling.
Consider having a stack of different currencies as a store of value. You can consider putting 10% of your net worth in each currency. For example, if you have $100,000 in disposable income put $1,000 in Swiss Francs, Euros, and Kuwaiti Dinars.
Make sure you also know where the nearby money exchanges are in your town. You might have to one day exchange your Swiss Francs for your local currency. The foreign currency can accumulate in value as yours decreases.
You can also invest in foreign currency on exchanges. This is known as Forex Trading and is a great way to own foreign currency without having to hold it.
The final commodity that you must consider is owning Bitcoin. As people lose faith in fiat currencies, we can expect greater adoption of virtual currencies. Bitcoin will be the only option taken seriously by many investors.
You may want to consider buying as much Bitcoin today as you can. Bitcoin will be the essential currency needed to buy goods and services in peace times and chaotic times.
As a side note, you might want to invest in Bitcoin hardware wallets. One can expect this to become a popular commodity in times of financial crisis.
Those Are the Best Commodities to Invest In
Now you know the best commodities to invest in and how they can benefit you during a financial crisis.
You should start by investing in funds. This is a great way to own commodities by proxy. You can also earn dividends with this method.
Precious metals are great for a store of value and selling later. Base metals offer some promise. Foreign currencies store value and Bitcoin is the future currency you’ll need.
You also can’t make a better investment than knowledge. You’ll find more great information on our website.