Generally, there are three categories of commodities: softs, hard and energy. For retail and institutional investors, it seems like a combination of commodity trading strategies will usually reap better profits than only one strategy. This is because different kinds of commodity investments complement each other. A good example would be investing in gold alongside crude oil or coffee. This diversifies your portfolio, so you don’t have to invest all your capital on just one commodity. It also lowers risk considerably since if any of these assets lose value, other assets will always balance it out and perhaps give some profit as well.
What Are the Best Commodities to Trade with in the UK?
Coffee
This commodity is one of the best commodities to trade within the UK. It’s also trendy among investors since it’s usually associated with luxury and leisure, which are two things everyone wants. Coffee can be purchased as green coffee or roasted, depending on what kind of coffee you like more.
The price for this commodity has increased over 600% in five years, most probably due to its ever-growing popularity. This makes most people think that investing in coffee isn’t worth it because, at some point, its prices will plummet once again. Although that may happen eventually (because nothing lasts forever), it may take a long time before that happens. After all, coffee drinks have become an essential part of many people’s lives, whether to kick-start their day or to end it with a delicious cappuccino.
The price of coffee is expected to continue its growth trend in the next five years, making now the perfect time for investing.
Crude Oil
As far as commodities go, crude oil is also one of the best trading commodities because it has many uses. Crude oil can be used as fuel, lubricant and even chemical products. That makes this product have value no matter what climate conditions are like. On top of that, there are also different types of crude oil products available on the market these days, which means you can invest in whichever type suits you best.
Gold
Gold has always been associated with luxury and wealth since ancient times. This commodity also has a lot of uses in technology and jewellery, which makes it even more attractive to people looking to invest in commodities. Its value may not be as high as it used to during its peak, but if you do the calculations correctly, gold still has massive potential for growth in ten years. That’s why investing your money in this product would help secure your future – which is perhaps one of the most important investments anyone can make.
Cocoa Beans
Cocoa Beans may seem like a random product on this list, but cocoa beans have been used for thousands of years in food products such as chocolate. The demand for chocolates has increased significantly in recent years, especially among young adults who love indulging themselves with them every single day. It’s also one of the most consumed commodities in Europe right now, which makes it an excellent choice for trading.
The price of this commodity grew by over 600% over five years. It is expected to remain stable and increase again within the next five years too.
Natural Gas
This is one of the most critical commodities in the world right now. It’s highly demanded not only by individuals but also by many companies and industries. Natural gas can be found throughout different regions but is primarily obtained from Canada, Africa and Russia. About half of all-natural gas in the world has been produced from these countries alone. The demand for natural gas will continue to grow exponentially over the next five years, making it an excellent choice for investors looking for a return on their money.
One small tip: since you don’t need to trade this product physically (it’s basically liquefied gases), make sure to find a reliable supplier before deciding whether or not you want to invest in natural gas.
