¶ … Investment Instruments
An upsurge of The recent increasing interest in commodity investing is has driving en the development of investment instruments that accommodate the needs ofavailable for investors looking for exposure to commodity prices. Historically, direct exposure to the commodity market has been seen as complicated and often too costlyexpensive for the average investor. However, there are now instruments that offer investors a cheap and easy, inexpensive access to directly exposure to commodity price movements.
This section will explore This part will look more into the different instruments available to investors, and discuss commonly held paradigms about their advantages and disadvantages. This discussion is intended e purpose is to providegive the average investor with more complete and detailed better information about of the instruments well available, before they investing in the commodity market. In this paper, Sseven instruments are discussed in this paper, as follows: Futures contracts, stocks, options, exchange traded funds (ETFs), exchange traded notes (ETNs), commodity mutual funds, e-commodities, and contract for a difference (CFDs).
Futures contracts
Futures contracts are standardized agreementscontracts between two parties to buy or sell an underlying asset or commodity at a predetermined price at a specified particular point in the future when the contract matures (Bodie, et al.Kane and Marcus,...
Commodity Investing Are there potential risk reduction and diversification opportunities in adding commodities to a Norwegian investor's asset portfolio? Recent global economic turmoil has inspired investors all over the globe to look for ways to protect their portfolios and to continue to make them grow despite a weak economy. Investments in commodities have been suggested as a solid hedge against future turmoil in the markets. The question is whether this is good
A common thread through these fifteen stocks is that they not only represent diversification as a group, but most of the companies chosen also have a range diversification within the company's operations. The companies are spread around the world, and include a number of sectors. For example, within technology the portfolio has access to the health care sector through Cerner; within ADRs there is exposure to the Internet, chemicals and
These types of investments are often illiquid, so the investor needs to view them as long-term investments. However, the lack of liquidity also means that for the most part they have low levels of correlation with the broad market. Derivatives are another possibility, and their potential impact on the portfolio will be discussed in the next question. They can either increase risk or decrease risk, depending on the type of
Likewise, a young investor may hold mainly equities. Investor risk tolerance is another impediment to achieving asset class diversification. Investors will low risk tolerance, for example, are unlikely to hold high equity positions and even less likely to utilize more obscure securities like hedge funds. Yet, portfolios without equities may be highly susceptible to changes in the prevailing interest rates and therefore lack diversification. Indeed, for many investors a fully-diversified
Investments are the assets or items purchased with the anticipation to generate the income in the future. In the economic sense, investments refer to the goods and services purchased and not consumed today for the purpose of generating wealth in the future. Similarly, going to a university or building a factory to produce goods and services are the examples of investments. Within a financial environment, investors purchase assets with the
(Steward, 2008, ¶ 15). II: BODY (TITLE TO BE DETERMINED) Introduction To explore the thesis, introduced at the start of the paper, the writer addresses the question: Do the investment risks that customers of conventional banks and financial houses may experience differ from those customers of sharia compliant financial institutions may encounter? During this segment of the research paper, the writer relates relevant information to Investing (Including Risks) Investments Contemporary Considerations Investing (Including Risks) Investments Sukuk depict
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