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The Importance of Commodity Investing in Times of Inflation

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Learn how commodity investing can serve as a valuable inflation hedge.

a chart showing the performance of various commodity prices over time.

Commodity-linked dividends can be volatile, but these companies are also inflation hedges. As inflation rates rise, so do commodity prices, making commodities a valuable addition to any investment portfolio. However, investing in commodities can be complex and risky, which is why it's important to have a solid understanding of the market before diving in.

Members of Commodity Investing by Students at Virginia Tech (COINS) recently took a road trip to New York City as part of their education on commodity investing. They visited the New York Mercantile Exchange (NYMEX) and received a firsthand look at how commodity trading works. This experience highlights the importance of education and research when it comes to commodity investing.

The KFA Mount Lucas Strategy ETF index includes futures contracts on 11 commodities, 6 currencies, and 5 global bond markets. This ETF provides investors with exposure to a diverse range of commodities, currencies, and bond markets, making it a valuable tool for those looking to invest in commodities.

Investors have access to a number of different types of assets that they can put their funds into to try to generate a profit. These can include stocks, bonds, real estate, and commodities. Each asset class has its own set of risks and rewards, and it's important to understand these before making any investment decisions.

Rising oil and gas prices have dominated headlines recently, with some commodity prices hitting record highs over the last year. This has led to increased interest in commodities as an investment option, as investors look for ways to capitalize on these price increases.

Heightened inflation means the value of your money is being eroded, but there are strategies to shore up your portfolio. One such strategy is to invest in commodities, which can serve as a valuable inflation hedge. As commodity prices rise with inflation, investments in commodities can help protect against the erosion of purchasing power.

Our investing experts pick the best futures trading brokers by reviewing platforms, commissions and fees, tools, research and support. This highlights the importance of doing your research and finding a broker that can provide you with the tools and support you need to succeed in commodity investing.

Commodities are often overlooked as a component of an investment portfolio, with many financial advisors recommending only allocations of stocks and bonds. However, commodities can provide diversification benefits and serve as an inflation hedge, making them a valuable addition to any portfolio.

HGER's dynamic increased allocation to gold has proven advantageous this year, as the price of physical gold has rallied above $2000. This highlights the potential benefits of investing in commodities, as they can provide valuable returns in times of market volatility.

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