Intuitive Investment Ideas for Commodities and Products
Investing is the best way to put your money to work for you, but there are so many investment options that it can be head-spinning for beginners trying to learn the ropes. Many people are lured into investing by the draw of generating residual cash flow, but few ever get further than sticking a couple of toes in the water to check the temperature.
The more you know about the many investment opportunities at your disposal, the better investment choices you can make. Continue reading to learn about some unique and intuitive investment ideas for commodities and products.
Gold is golden.
People have been trading gold for thousands of years. The precious metal can be used for anything from jewelry to currency and is even used as a conductor in electronics. At one time, the United States dollar was based on grams and ounces of gold. Even though gold is no longer used to back our money, it’s still worth a pretty penny.
However, have you ever thought about investing in a gold mining company rather than the commodity itself? Alamos Gold is a mining company based in Canada that owns and operates three mines in North America, including the Mulatos gold mine in Sonora, Mexico, and the Island Gold and Young-Davidson gold mines in Ontario. They even manage a few mines abroad, including one in Kirazli, Turkey.
The expanse of their operations is evidence that Alamos ascribes to the gold standard in the gold production industry. The current price of gold is over $1700 an ounce, but a share of Alamos’ stock is less than $10. When you consider how many tons of gold Alamos produced last year, you can understand how $1,700 of Alamos Gold stock is worth more than an ounce of gold.
The opportunity to exponentially increase their gold production is what lands Alamos Gold in Turkey. Their mining operations in Kirazlı have already yielded great results, and Alamos’ investors can expect to reap the rewards.
Invest in mortgages.
During the financial crisis of 2008, we in the United States probably learned more about how mortgages work than we were ever intended to know. The federal government did what it had to save the country from a complete economic collapse, and here we are, over a decade later, making our way of yet another financial crisis, this one caused by COVID-19. Even though the reasons for the recession of 2008 and the COVID-19 recession of 2020 are different, 2020 was a reminder that we have to prepare for financial crises.
The main thing we learned about mortgages is that they can be a great investment opportunity if you have enough capital to invest. Residential mortgage-backed securities (RMBS) are great options for high net worth and income individuals looking to diversify their investment portfolios.
The difference between investing in mortgage loans and RMBS is that lenders have to pay interest rates on their mortgage loans whereas RMBS investors receive monthly interest rates on their investments. One of the cons of investing in RMBS is that some mutual funds and trusts require an initial investment of up to half a million dollars.
The greater the credit risk of the mortgage-backed securities (MBS) you invest in, the greater the possible rewards. However, going with the more prominent tranches is a more sure bet even though you can respect a lower return on your investment.
The reason high credit risk tranches have more potential for high returns is that people who are considered to be payment risks pay higher interest rates on their mortgages. Those interest rates go to the holders of mortgage-backed securities. To learn more about how to get started with investing in RMBS, visit FirstMac.
Business insurance is an investment.
If you’re a sole trader (or sole proprietor), you’ve already invested in your business, but now you need to protect that investment. Sole traders insurance is a type of protection that buffers your business against financial liabilities to consumers.
If you’re running a company on your own and don’t think your business needs insurance for sole traders, your tune might change quickly if a customer files an injury or property damage claim against you. Sole proprietorships and small businesses close regularly because of liability claims, which is why you should invest in an insurance plan that protects your company’s financial interests as if it were the Federal Reserve. There’s always risk involved with investing, but sole trader insurance protects your investment from risks.
Whether you choose to invest in a stock like Alamos Gold (AGI), RMBS, or sole trader insurance for your sole proprietorship, the main thing is to learn as much about the investment opportunity. Alamos’ stock, mortgages, and small businesses are all different types of investments, but they all have the potential to afford you a lifestyle worthy of royalty.