A rally in domestic commodity investments has been seen by many financial analysts.
Although the overall picture looks good for commodities in 2017, you may need to avoid the worst commodities that could bring negative results for your portfolio.
During an upswing in commodities, not all of them will show big gains.
Investors can choose from stocks in precious metals, energy, or agriculture, but some commodities have considerations when it comes to geographical regions or stocks that may tumble because of changes in Washington.
Here are six of the worst domestic commodity investments to put your money in:
- Orange juice futures — Weather conditions can cause prices to drop quickly for investments in orange crops and frozen orange futures, The Street reports. Many orange juice products are centralized in Florida. Cold weather or even hurricanes can bring about negative results.
- Agriculture sector — Risk takers may enjoy agricultural commodities, but predicting the future of such crops as wheat, corn, oats, grain, fruits, or vegetables is difficult. While many commodities performed well in 2016, the agriculture sector was hardest hit by a loss in value, according to 24/7 Wall St.
- Oil futures ETFs — These exchange traded funds judge future prices on a monthly basis, so they don’t necessarily represent the rise or fall of actual oil pricing. They have been called “the worst investments in the world” by investor Daniel Dicker in Real Money.
- Commodities speculation — Speculators trade commodities, hoping to profit from a volatile market. However, the risky venture doesn’t guarantee success and could lose money for many people who base their investments solely on the volatility of future prices, CBN explains.
- Crude Oil — Forecasts of rising U.S. oil production could have a negative impact on crude oil prices with a decline in some crude oil futures at the start of the year, according to Market Realist. The weakness might indicate a temporary avoidance of crude oil.
- Silver, long term — Silver may show a better performance in 2017, compared to its lower price range in the past few years. Investors may look at silver in a three-year time frame, according to Pramod Jaiswal in Investing.com. For longer term investing, however, choosing gold would be a better option.
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