A Primer for Clients to Invest in Commodities

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Commodity investing is one reason investors seek the help of a financial professional. Learn how SmartAsset can help you find clients looking for advice.

The investment world is full of an overwhelming number of options, including equities, bonds, exchange-traded funds (ETFs) and more. Commodities may seem like just another one of the bunch, but these products offer a unique way to invest your money in the market. If you have questions about a specific commodity, or you’re new to creating an investment portfolio, it might be helpful to consult a financial advisor.

What’s considered a commodity?

Generally speaking, commodities are natural, at least to some degree. So where does the term “commodity” come from? Most of these materials require some form of human interaction, like mining, farming, drilling, building and transporting. Only after this do they become products available on the public and private markets.

Here are a few of today’s most common commodities to invest in:

Examples of Commodity Markets

Agricultural Resources

Wheat, barley, corn, oats, soybeans


Soft Commodities

Sugar, coffee, cotton, cocoa


Renewable Energy Resources

Solar, wind, hydropower, ethanol, geothermal


Non-Renewable Energy Resources

Crude oil, natural gas, nuclear, coal, propane



Live cattle, feeder cattle, pork bellies, lean hogs


Precious Metals

Gold, silver, platinum, palladium


Industrial Metals

Steel, copper, aluminum, iron


Man-made products are, on a large scale, about as close to replicas as possible. Although this does not apply to the above materials, the market treats all commodities equally. In other words, gold is gold, regardless of the mining company it comes from, and cattle are cattle, regardless of the farm they come from.

Think about it. When you go to the store, do you check where each fruit and vegetable was grown? When you’re filling up at the gas station, do you ask the store clerk which country the crude oil was drilled in? Probably not. This principle is what makes commodities an investable asset, as these products are sold on a global scale under the widely acceptable guise of uniformity.