Commodities as an Alternative Asset Class

oil wellCommodities are physical substances that are fundamental to the creation of other products or to commerce generally. Unlike most other products that are bought and sold, one commodity is basically indistinguishable from any other commodity in the same category. Though there may be various grades of a given commodity that indicate its quality, those grades are standard across producers; one company’s light sweet crude oil is essentially the same as another’s light sweet crude.

Examples of commodities include:

  • Oil
  • Natural gas
  • Agricultural products such as corn, wheat, and soybeans
  • Livestock such as cattle and hogs
  • Timber
  • Metals such as copper, nickel, and zinc
  • Precious metals such as gold, silver and platinum

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