Some amazing things are happening in the stock market right now. Investors are seeking commodities to hedge against inflation. Even pension funds are embracing commodities.
For those seeking portfolio protection with exchange traded funds (ETF) some see the potential of cashing in on rising food prices. This can be done by Treasury Inflation Protected Securities to your portfolio as well as focusing on U.S. Treasury Bonds and notes.
Other areas would include food commodities, steel industry, natural gas, agriculture and base metals that put your diversified investment portfolio in a great position for the emerging global markets.
By having a diverse allocation of portfolio resources it will be easier for you to insure against volatility and increase returns.
What exactly are commodities?
Interestingly, the agribusiness niche is HOT right now, with more businesses becoming involved in food production, contract farming, seed supply, agrochemicals, and farm machinery.
This creates more opportunities in the areas of wholesale and distribution, processing, marketing, and retail sales.
It is important to note that agribusiness jobs, careers and management positions will be a good start for recent college graduates.
Some examples of commodities would include:
Corn
Wheat
Soybeans
Sugar
Orange Juice
Coffee
Cotton
The Best Energy Source of All
Typically investors have put lots of money in the oil and gas industry because is provides energy to our automobiles and houses.
The agriculture industry is becoming a more powerful energy source for human life.
This is why it is in your best interest to learn about agriculture ETF funds because of its long term underlying fundamentals that show stability and increased demand for future growth.
The reasons this is such a solid business structure is because we can not produce more land, so the land available for farming is very valuable. Not to mention the increased population in concentrated metropolitan areas will continue to grow.
Reference:
The Globalization of Agribusiness and Developing World Food Systems by John Wilkinson -
monthlyreview.org/2009/09/01/globalization-of-agribusiness-and-developing-world-food-systems
Disclaimer: this is for informational purposes only and is not meant to give investment advice. It is recommended that you consult a stock broker before investing in any type of stocks or ETFs.