News Invest in Commodities: Safe Money Gain or Risky Bet?

News Invest in Commodities: Safe Money Gain or Risky Bet?

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Friday, 16.06.17 , written by Juliane Wellisch Especially when turbulence threatens the capital markets or high returns with other financial investments are difficult, investors turn to commodities and invest there. Currently, commodities are increasingly coming back into focus. Investing in commodities such as metals, oil or precious woods involves as many opportunities as risks. >

Trotz neuer Entwicklungen: Besser vorsichtig in Rohstoffe investieren

Gold and silver are classic commodities for investment

Most people think of gold, silver and possibly oil when it comes to investing their money in commodities. However, additional raw materials are needed in the industry, which means that it can also be worth investing in platinum, palladium or copper . There are also renewable raw materials, for example wood , which are possible even in the case of sustainable cultivation without overexploitation of nature. In addition, investors can invest in agricultural commodities such as coffee and cocoa , whose constant demand makes large fluctuations in value less likely. Investors who invest part of their assets in commodities should, however, deal with the specific features .

Before investors invest in commodities: observe current developments

A few years ago, it was above all China’s hunger for raw materials, which drove commodity prices soaring, that in the financial crisis it was investors’ need for security. In the recent past, however, many commodities have rather experienced a significant price decline . Oil was cheap for a long time and metals lost as much as 50 percent. Now many commodity prices are rising again. This has different causes. For example, new technical advances can increase the demand for a specific raw material such as lithium in industry. Also possible is a price increase by an artificial throttling of the availability . Especially in the case of oil, this strategy is known to the OPEC states, who thereby help to shape the price.

Overall, experts are currently seeing positive performance for many commodities . Even small investors smell their chance.

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Are there regularities in the price development of raw materials?

Investors investing in commodities for the first time are hoping for reliable statements on how the various prices of precious metals and co. Will develop in the future. But that’s not easy. The price of gold is subject to certain laws . Thus, the commodity as a “safe haven” for investors is particularly interesting when there is unrest in the financial markets. As a result, the price of gold rises in times of crisis, while it tends to decline in prosperous capital markets. However, even for experts it is hardly possible to reliably predict when it will come back to a crisis or a phase of recovery, or how long it will last.

Investing in commodities: these are the opportunities

Commodities are suitable for making your own assets inflation-proof . Because in contrast to currencies, commodities are not tied to the loss of purchasing power of money. In addition, with a well-established raw materials portfolio, a double-digit percentage gain can be achieved – provided that the purchase and sale of the respective commodity takes place at the right time. If you invest directly in commodities, for example, an investor gains a bullion for the domestic safe, but no real returns are possible . However, investing in the commodity-producing companies’ stocks – so-called commodity investments – gives investors the opportunity to benefit from positive developments in the commodity markets and to additionally take income such as dividends .

Risks of investing in commodities

Depending on the type of commodity, the risks to investors vary. In the worst case, plants in wood can be completely destroyed by pest infestation, fires or bad weather . The price development of coffee, cocoa and other agricultural commodities is also dependent on good and bad harvest years . The value of industrial raw materials can suddenly shoot up with new economic data – or fall into the ground. Even supposedly safe predictions, such as the increasing demand for lithium from the proliferation of electric cars, could go nowhere due to new scientific findings and the use of another raw material in the manufacture of the necessary batteries.

There is never any security in the forecasts. Therefore, experts also advise to invest only a portion of the available assets in commodities . This allows greater losses of value to sit out and wait for better times.

Service: The investment comparison calculator shows you which options you have when investing with which opportunity-risk ratio.

Invest in commodities with ETCs

With the so-called ETCs, it is also possible to invest in commodities. The ETCs (Exchange-Traded Commodities) are a special form of securities. Similar to ETFs that track the performance of a stock index, an ETC simulates the performance of commodities . This considerably facilitates the investment for private investors. However, it is important for savers to know that a bankruptcy of the issuer, ie the issuer, may threaten the total loss of the investment.

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  • Juliane Wellisch
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Now a law should lower the discretionary interest

Berlin – The current account interest on current accounts remains at a high level. Now Justice Minister Heiko Maas (SPD) threatens the banks now with a law. Since so far all reminders of the government had not helped, “we will now bring a law on the way,” Maas said the “image on Sunday”. It is to oblige the banks to publish their Dispozinssätze on its Internet page – and thus lead over more competition to sinking interest rates.

 

Image: Credit card 

The Stiftung Warentest had only reported back in mid-September that the disputes of around 1,500 banks surveyed averaged over ten percent. As the banks at the European Central Bank (ECB) could borrow money almost free of charge, a double-digit interest on the current account is clearly too high, criticized the consumer advocates. They also criticized the lack of transparency of the financial institutions. In some branches, the price announcements are therefore untraceable, many banks do not publish the dispozins on the Internet.

With the planned transparency obligation, Maas believes “it will not be long before there are the first comparison portals that make it very comprehensible for the consumer what he pays where.” This would make it easier for customers to choose a bank that would charge reasonable interest rates, he told the newspaper.

Show ways out of the dispo trap

The Minister of Justice also wants to oblige the banks, savings banks and Volksbanks legally to consult with customers who are constantly in the dark with their account. They are to show the customer “ways out of the dispo trap”.

Dispo- and overdraft interest must be paid if a bank customer no longer has money in the checking account, but it is charged further. Initially, the bank usually grants a disposition credit – in short: credit line or dispo. This allows a limited overdraft. Limit are often two or three monthly salaries. For overdrafts in this context, the discount rate applies. If the account continues to be overdrawn, overdraft interest accrues.

 

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Foreign currencies: investment with pitfalls

Munich – An end to the euro crisis is still not in sight. Many savers are now worried that their money could fall victim to inflation. Is it worth it to invest in other currencies instead of the euro?

 

Picture: Money 

Low interest rates on the one hand, worries about the future of the euro on the other hand, make some savers think about investing their money in dollars, Swiss francs or even Norwegian kroner. But there are pitfalls.

Where to go with the money?

If you look at the four big currency areas (US dollar, British pound, yen and euro), everyone would have a debt problem and face demographic challenges, says Andreas Beck. Overall, the eurozone is still the healthiest of the four currency areas, according to the executive board of the Institut für Vermögensaufbau in Munich. “If you want to protect yourself anyway, you should invest in countries that do not have these problems.”

These were divided into three groups: resource-rich countries such as Norway and Australia, countries with high budgetary discipline such as Sweden and Switzerland and countries with good economic data and low debt such as Indonesia and Turkey. “However, currency markets are unpredictable,” Beck points out. “Fluctuations between 10 and 20 percent within the first year are not uncommon.”

Perhaps a reason why many Germans remain largely loyal to the euro. There is no greater tendency for German savers to convert their money from the euro into foreign currencies, explains Martin Schulte from the Association of Foreign Banks in Germany (VAB). After all, economic growth and good demographic development alone are not sufficient reasons for investing in the currency of a country. In the case of the Turkish lira, for example, inflation is well above the European level – despite good general conditions.

“From a German point of view, it does not make sense to invest in foreign currencies”

“If you believe in ending the euro, you can invest your money in traditionally stable currencies such as Canadian dollars or Swiss francs,” says Schulte. “Because at least in each country, the purchasing power is maintained.” Although some fees were deducted and there is the foreign currency risk as with all currencies, even if the interest rates in Germany are similar to those in the countries mentioned.

“From a German point of view, it makes no sense to invest in foreign currencies,” says Thomas Krüger of Stiftung Warentest in Berlin. “Even if the Eurozone falls apart, the German currency would rather appreciate, the money abroad would be worth less.” In addition, “No matter how bad the Federal Republic is, the neighbors will be even worse.” Therefore, the expert advises no private investor to invest in foreign currencies, and certainly not such investors who rely on security.

Foreign currencies are also hardly suitable as an alternative to German low interest rates, says Krüger. “Private investors imagine this too easy, because high-yielding countries are usually the ones in which the currency is devalued.” That will eat up the interest rates again.

Government bonds and foreign currency accounts

For example, investors can invest in other currencies via foreign government bonds. In this case, funds are most suitable for private investors, because they invest the money in various securities and thereby spread the risk. An alternative is money market funds, which invest in short-term government bonds or time deposits in various countries.

Another option is foreign currency accounts. Here, consumers would have to decide, among other things, whether they open this at a German or a foreign bank. In addition, they should pay attention to whether the money will earn interest or not. “At German institutions, accounts in the currency of an EU member state, such as Swedish krona, are always protected by the European deposit insurance up to a value of 100,000 euros,” emphasizes Krüger. “As a precaution, you should ask a foreign bank beforehand what deposit insurance it is subject to.”

On the other hand, if you bet on the US dollar or other non-EU currencies, you should make sure that the foreign currency account is secured by a bank-specific deposit guarantee, such as the deposit insurance fund of the Federal Association of German Banks. “But many foreign banks are also members of this deposit insurance fund,” emphasizes Martin Schulte.

 

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After charges of perjury: Petry admits error in a statement

The prosecution Dresden Frauke Petry has indicted on suspicion of perjury. The former politician AFD responds – with allegations against the verification of credentials.

For the prosecution against the former Dresden AFD politician Frauke Petry brought a charge of suspicion of perjury, Petry has admitted an error in its statement on Wednesday afternoon. She is accused, testified falsely on 12 November 2015 of honor before the election review committee of the Saxon State Parliament in Dresden and to have their statements under oath, the Justice Department said in Dresden on Wednesday.

Petry even said she had testified not intentionally wrong. “The indictment accuses me unjustly to have deliberately said something wrong. It is true that I have given my memories, “Petry said. Of the possibility to reproach her the contents of the loan agreement, the Committee had, unfortunately, time did not exercise.

“I would have corrected my mistake on derivative granted.” This was the committee chairman but want to avoid obvious “to utilize my mistake politically against me.”

The Immunity Committee of the Parliament had agreed to a request from the prosecutor’s office on 17 August, to withdraw the former AFD faction leader protecting from prosecution. Petry had itself out in favor of this: One method offers the possibility to comment publicly on the allegations, she said at the time.

Prosecutor determined more than a year

Specifically, it’s about statements Petrys to loans from the parliamentary candidates to finance the election campaign of the AFD in the Saxony state election in 2014. According to prosecutors, they should have said that the candidates would have to decide whether the loans repaid or converted into a donation after a successful state election to be. These details of the witness are contrary to the loan agreements, after which a parliamentary candidate waived in the event of his election to the repayment of the loan, it said.

The prosecutor’s office in Dresden had investigated the former AFD federal and state leader more than a year. The starting point was conflicting evidence from her and AFD Treasurer Carsten Hütter before the election review committee of the Parliament in connection with the preparation of the list of candidates for state elections. Then two criminal complaints had been made against Petry. The investigation of Hütter has already been set in May.

With a swift action, the opening is not expected, said chief prosecutor Lorenz Haase on Wednesday. The Regional Court Dresden must first apply for the waiver of immunity of members of parliament Petry. The new parliament is due to meet until October 24 for its constituent meeting scheduled.

The right-wing Alternative for Germany (AFD) was the third-strongest force in the parliament drafted. Petry had won the direct mandate in their constituency Saxon Switzerland / Eastern Ore Mountains but announced a day after this success, their withdrawal from the parliamentary group. On Friday, she resigned from the AFD.

Petry is in factional dispute in the AFD inferior. The Bundestag it belongs after emerging as independents. Few Party members have followed their example and the AFD have turned their backs. As the first member of the Bundestag “Bild” newspaper, Mario Mieruch left the AFD Group according to a report of. is speculated whether Petry will establish, together with the faithful a new party.

Diplomatic immunity: The AFD thriller

After her party outlet had the politician complained in the “Welt am Sonntag” a “witch hunt” in their former party. Who was regarded as her followers would be “like a traitor treated and followed literally in the social networks.” Because of the attacks on their person, it was impossible for her to work in the new AFD parliamentary group.
In Saxony state parliament and the Bundestag she now wants to form a group of several deputies, Petry said the “Welt am Sonntag”. An “exodus from the AFD” she did not run, she said.

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