Alternatives Flashcards
What are hard and soft commodities?
Hard - Products of mining and extractive processes - Gas and gold
Soft - Typically grown - coffee sugar
How could you invest in Commodities?
Commodity related futures and options (exchange or direct)
ETC - Exchange traded commodities - pooled investments listed on LSE track performance of underlying commodity or commodity index
Buying shares in companies e.g. mining companies
What are cryptocurrencies?
Digital currency produced by computer
Blockchain = technology used to process payments, unique to each user
Risk of cryptocurrencies?
Anonymous transactions not backed by central bank or government
No regulation
Digital wallet
Benefits of commodities?
Some such as gold - seen as safe haven
Way of investing in emerging markets - demand has been high in emerging markets as they develop
Diversification - tend not to be correlated
