Commodities
Commodities represent real, physical assets — the building blocks of the world.
Gold, oil, agriculture, metals, and energy resources all fall under this category.
They protect your portfolio during inflation and global uncertainty.
What It Is
Commodities are raw materials used across the economy — from energy to food to precious metals.
Unlike stocks (companies) or bonds (loans), commodities reflect real-world supply and demand.
They’re often used as a hedge when markets get unstable, especially gold and energy.
How It Works
Commodities move based on:
- Supply — droughts, shortages, mining output, geopolitics
- Demand — industry use, technology, global growth
- Inflation — rising prices boost commodity value
- Dollar strength — commodities fall when the dollar rises
Most commodity investing is done through ETFs — safer and easier than futures contracts.
Pros
- ✔ Hedge against inflation
- ✔ Low correlation to stocks
- ✔ Protects during market crashes
- ✔ ETFs make it easy for beginners
Cons
- ✘ Highly volatile
- ✘ Prices depend on geopolitics and supply shocks
- ✘ No dividends or income
- ✘ Harder to predict than stocks
Risk Level
⭐️⭐️⭐️⭐️ (Higher Risk)
Gold = lower risk
Energy = high volatility
Agriculture = seasonal risk
Industrial metals = cyclical
Time Horizon
Best used as a short–medium term hedge or 5–10% of a long-term portfolio for stability.
Beginner Mistakes to Avoid
- ❌ Betting too much on energy or oil spikes
- ❌ Ignoring geopolitical effects
- ❌ Not understanding that commodities don’t produce income
- ❌ Buying leveraged commodity ETFs (EXTREMELY risky)
Popular Commodity ETFs
🔎 Pro Tip:
Research each ticker you're curious about — search it online and read what the company, fund, or asset actually does.
Look for: purpose, holdings, long-term outlook, and risks. Understanding this builds real confidence.
🥇 Gold
GLDIAUSGOLBAR
🥈 Silver
SLVSIVRAGQ
⛽ Oil & Energy
USOBNOXLEVDE
🌽 Agriculture
DBACORNWEATSOYB
⛏ Industrial Metals
PICKDBBCUJJC
🛢 Broad Commodity Funds
DBCBCICMDYPDBC