Effective means of hedging risk What is commodity investment?

Due to the sluggish global economy and political instability, interest in commodity investment is growing. It is not well known in Japan, and commodity investment is generally said to be difficult, so why is commodity investment attracting attention?

Hard commodities and soft commodities

The sluggish global economy, affected by the coronavirus pandemic and Russia's invasion of Ukraine, is gradually showing signs of recovery. Under such circumstances, commodity investment is beginning to attract attention.

Commodity investment is literally investment in commodities (products), and refers to investment in the "commodity market" such as crude oil, gold, copper, and agricultural products.

Commodity investment is mainly classified into "hard commodities" and "soft commodities." Hard commodities are precious metals such as gold, silver, and platinum, industrial precious metals such as zinc and aluminum, minerals such as coal and uranium, and natural resources such as crude oil and natural gas.

Soft commodities include agricultural products such as wheat, corn, soybeans, and coffee beans, livestock products such as farmed cattle and pigs, livestock feed, and raw materials for biofuels.

Because these are real assets, their price movements differ from financial products such as stocks and bonds, and they are suitable for diversifying investments, which is why they are also called alternative assets.