Raw materials are formed as one of the alternatives for investment in more or less complicated moments. With the advantage that you can choose different financial assets, from coffee to soybeans, through sugar. There are many proposals that you have open to make the savings profitable in the best possible way. That is, with a superior performance as a consequence of the trend of its markets. But being such a diversified sector, you have different strategies to carry out operations. As a more original and innovative option than in the other cases offered by the financial markets at the moment.
From this approach in private investment, agricultural raw materials are located in lows of many years. In some cases, with prices not seen since 2015. With the exception of arabic coffee, which can collect the monetary flows that seek financial assets with a stable and slightly upward trend. In any case, each of these raw materials shows a different evolution. So that you can have more information to make a decision, we will show you what the evolution of some of the most relevant raw materials is being.
It is an alternative strategy whose main objective is look for new business opportunities. Beyond the equity markets, since small and medium investors do not only live on the stock market. At a time when these markets may begin a downward path, although some financial analysts are more negative and point out that in the coming months a depression may be generated in these financial markets. Whatever the situation may arise, it will always be very interesting to have a replacement so that you can invest your money. Although it is in a market as unconventional as it is the one that is constituted around raw materials.
Raw materials: coffee as an asset
If there is a raw material that serves as an exponent to make any kind of investment, that is none other than coffee. In addition, it is one of the financial assets that better technical aspect has right now. Because indeed, despite the strong production in some international destinations, it could even benefit prices. For a fact as concrete as the decline in Brazilian production. To the point that experts in this market point out that the reduction in supply is very likely to be felt. In any case, it is one of the most suggestive raw materials to take positions from now on. Despite the risks involved in this kind of operation.
We must also bear in mind the production in Colombia, the coffee producing country par excellence. It cannot be forgotten that it is responsible for 15% of world production. Well, the data that are becoming known do not indicate substantial changes with respect to previous years. Precisely the last parameter that we have is that of the year 2016 and that indicates that the production grew in this period about 30%. However, the drawback of this financial asset is that you will have to go to international markets to take positions. Unless you opt for an investment fund of these characteristics. But in any case, it is one of the raw materials to take into account from now on. Although with greater volatility than in other investment proposals.
Sugar, unknown among investors
Of course, there are less recurring options among investors. And without a doubt this raw material is one of them. Not surprisingly, it is one of the great unknown by retailers. It should not be forgotten that until now, the Brazilian sugar production, the largest sugarcane producer with a world share of 22%, accumulates growth that is close to 6% per year. However, the risk is even higher than in the other proposals due to the high volatility of this financial asset. And that is reserved for a very well defined inverse profile. Where profitability is sought from a more common more aggressive proposal.
Another piece of information of special interest is that which refers to the European Union. Well, from this body it is estimated that within ten years, the production of sugar in this economic area will increase by 6% compared to last year's levels. It is therefore another of the possibilities that you should assess to have in the investment portfolio. Possibly alongside other proposals, including those from equities. However, there is a strong divergence that you should assess from now on. It is none other than the fact that under strong growth in supply, analysts in this financial market do not see sugar prices recover. This would be bad news for your interests and if you are finally going to take positions in this important raw material.
Cocoa, with an increase of 18%
Another of the raw materials in which you can expose your savings is undoubtedly cocoa. Until a few years ago, it was one of the companies that generated the highest returns through its operations. But it is true that things have changed and things are not as before. Where at the moment, the most notable fact is that cocoa production has increased by 17% compared to previous years. The climatological factors The forecasts for this financial asset are changing day by day, and in any case it is one of the most complicated to open positions before the end of the year. Where one of the most important factors that will affect its production is derived from the severe drought that Brazil is suffering. One of the most important producers in the world and that largely determines the price of cocoa in the financial markets.
In any case, its positioning is also very complicated since you will have to go to international places to meet this special demand. To avoid any kind of problems, the best strategy to take positions in one of the most important raw materials such as cocoa may materialize through exchange-traded funds, better known as ETFs. It is a combination of buying and selling shares on the stock market and mutual funds. But with less expansive commissions than in those financial products. On the other hand, you have a wide range of funds to consider this very original investment right now.
Risks of these operations
In any case, investing in these raw materials carries with it a series of inconveniences that you must assess to decide whether or not it is convenient for you to carry out these special operations. Not only because of the complexity of its operations, but also that you will have to leave our borders to carry out this new investment initiative. Of course, you will not have it easy since you will have to deal with many difficulties. More than you can imagine from the beginning. These are some of the ones you can find along the way.
- It is not a very conventional investment and therefore will require a deep knowledge of their respective markets. Where any miscalculation can pay dearly from now on. Only if you have experience in their operations will you have a greater margin to be in contact with these raw materials.
- Any incident, no matter how minimal, may affect the price of these financial assets. For this reason it is very difficult to adjust entry and exit prices of these financial markets. With greater risk in all the operations that you formalize from now on.
- It is such a complex investment that financial products are needed that can open positions in these raw materials. Along with other financial assets as in the preparation of investment funds or ETFs. As one of the strategies used to diversify investment in a more flexible way.
- It is not a very suitable investment for all profiles of small and medium investors. But only for the most aggressive and who want to take risks to improve their profitability levels. Given the low interest of bank products (term deposits, promissory notes or bonds). That rarely exceed the 1% levels, and that represent dissatisfaction for users.
- It is an investment that is so far from traditional canons that does not require the same strategies that you have used so far in another class of financial assets. To the point of having to use new working methods to achieve your goals.
- The risk is more latent than in other types of investments. Where you can earn a lot of money in a shorter period of time. Although for the same reason you can leave many euros on the way. Even leaving a significant hole in your checking account balance. For this reason, you must be more careful in the selection of raw materials. To take fewer risks than foreseeable.