Commodities
Gold, silver, oil, and agriculture — inflation hedges and diversifiers.
Commodities are raw materials used in production. They serve as inflation hedges and portfolio diversifiers.
Major Commodities
| Commodity | Ticker | Purpose |
|---|---|---|
| Gold | GC | Safe haven, inflation hedge |
| Silver | S | Industrial + precious metal |
| Crude Oil | CL | Energy exposure |
| Natural Gas | NG | Energy volatility |
⚠️ Commodity Risks
Commodity prices can be volatile and don't generate income. Consider futures, ETFs, or mining stocks for exposure.
Risk Level: Medium-High
Commodity Investment Guide
📊 Risk-Reward Matrix
| Commodity | Risk | Return Potential |
|---|---|---|
| Gold | Medium | 5-8% annually |
| Oil | High | Variable |
| Agriculture | Medium | 4-6% annually |
How vs Other Investments
Commodities Compares| Feature | Gold | Oil | Stocks | Bonds |
|---|---|---|---|---|
| Inflation hedge | Strong | Medium | Weak | Weak |
| Volatility | Medium | High | Medium-High | Low-Medium |
| Yield | None | None | Div | Coupon |
| Storage | Vault/ETF | ETF/Futures | — | — |
Historical Performance
Gold rose from about $280 in 2000 to roughly $2,380 in 2024, acting as a hedge during crises. Oil is far more volatile, swinging from negative prices in 2020 to over $120 in 2022. Commodities produce no income and are driven by supply-demand and macro cycles.
Frequently Asked Questions
Should I own commodities?
A small allocation (5-10%) of gold can hedge a portfolio, but commodities produce no income and are cyclical. Most investors get exposure via ETFs.
Gold or oil?
Gold is mainly a store of value and crisis hedge; oil is an industrial commodity with higher volatility tied to the economy.
How do I invest in commodities?
Through commodity ETFs or futures. Physical storage is impractical for most retail investors.
⚠️ Disclaimer
Figures above are historical/illustrative averages, not forecasts. Investment involves risk, including loss of principal. This page is educational and not financial advice.