Commodities

Revised by Ricardo Ribeiro

Commodities are physical goods like grains, gold, oil, and so on. 

Historically, commodities produced lower returns than stocks, but they offered diversification and some protection against inflation.

Unless you are a very sophisticated investor, you should avoid investing directly in commodities. It is also a good idea to leave derivatives for professionals. If you want to invest in commodities, invest using a commodities fund instead.

Commodities are not normally listed in an Investing for Beginners guide, and I agree... it is better used by more experienced investors. On the other hand, to present a better picture, I believe it is important that beginner investors understand all investing possibilities.  

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