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Flashcards in 4 - Alternative Investments Deck (3):
1

Problems with investing in art/collectibles

  • High transaction costs (high spread between buying and selling)
  • Don't generate income, sometimes cost money to store
  • High volatility (price depends on taste, supply & demand)

2

Commodities

What is the difference between hard and soft commodities?

Soft commodities are goods that grow (e.g. coffee, wheat, sugar).

Hard commodities and mined or extracted (e.g. oil, gas, metals).

3

Commodities

What methods can retail investors use to get invest?

  • Exchange Traded Commodities
  • Commodity funds
  • Shares in commodity companies (e.g. mining companies, farming companies)