Safe Haven Investment in Trouble Times

Commodity prices will likely rise again once the world economy starts growing and we suggest you to invest some of your money in commodities. It is must for you to be mastered before you begin trading because futures trading involve complications like margins and mark-to-market. Investing in commodity futures is not suited for an investor who is new or inexperienced.

Another option for you is to buy gold directly or through gold exchange traded funds (ETFs). Investors used to buy gold in a troubled economy because it is perceived as a safe investment. But gold may give only average returns whenever economy recovers.

Perhaps the best way to invest in commodities is through a commodity based mutual fund. Here the investment is in the companies that are related to commodity business – e.g. metals, oil, gas and more. The prices of commodities increase the profits of these companies and their share prices will also rise. Thus it is relatively safe and diversified way where an investor is indirectly investing in commodities. Following are some advantages of investing through mutual funds rather than directly through individual commodity based stocks:

1.       Diversification– You are exposed to a wide range of companies in different commodities.

2.       Relying on Expertise of Funds – This is for the analysis of demand and supply conditions in several commodity markets to determine which have the greatest potential upside.

The safest and most convenient way of investing in commodities for the average investor is “Commodity-based Mutual Funds”.

Founded in 2005, ABans Group has grown from being a trading house to a dynamic and diversified business group. We provide expertise in Broking Services, Merchant Banking, Non-Banking Financial Dealings, Gold Refining and Realty and Infrastructure. In a nut shell AbansGroup is a comprehensive Financial Services and Solution Provider, which aims to provide an end-to-end financial solution to all its clients.

Gold – A Strategic Asset

Gold is one of the oldest asset known to mankind. The price of Gold is derived by the quantum of demand for the lustrous metal. T In market downturns, Gold has always acted as a portfolio hedge and the recent pullback was no exception. The longer corrections or wider corrections in the market improves the effectiveness of Gold. Gold as a Commodity has shown that it is the only secure refuge for investors in years 2008, 2011 and 2015. As per your risk profile, the allocation of your portfolio to gold may be around 5% to 10% and this is possible through a variety of instruments such as gold equity funds, sovereign gold bonds, gold exchange-traded funds etc. As a safe haven, gold typically benefits from the flight of quality flows. Gold has the widespread acceptance and Indian households hold one of the highest quantities of gold in the world.

There are four advantages of Gold in any investor portfolio:

1.       Delivers positive long term returns.

2.       Improves Diversification.

3.       Especially in downturns, it provides much needed liquidity.

4.       Enhances portfolio performance through higher risk adjusted returns.

Gold is better than treasuries and stocks because it has gained over four percent in less than three months (year to date). Gold has been the best-performing asset classes year-to-date. Investors can actually enjoy price appreciation and fixed interest rates if they buy Sovereign Gold Bonds (SGBs). The transaction cost for gold ETFs is comparatively low but unlike gold bonds, gold ETFs cannot be used as collateral for loans. Gold deserves a rightful place in the portfolio of any investor.

Founded in 2005, ABans Group has grown from being a trading house to a dynamic and diversified business group. We provide expertise in Broking Services, Merchant Banking, Non-Banking Financial Dealings, Gold Refining and Realty and Infrastructure. In a nut shell Abans Group is a comprehensive Financial Services and Solution Provider, which aims to provide an end-to-end financial solution to all its clients.

ABans Commodity India Pvt Ltd (ACIPL), Founded by Mr. Abhishek Bansal is a SEBI registered Co, ABans Group of Companies, Comprises of companies having businesses like commodity trading, futures trading, gold futures and futures market, operating on platforms like BSEL, MCX, NSEL and more, which constitute the Indian share market.

Abhishek Bansal NSEL

SEBI the Regulator for Commodity Exchanges, Spot Exchanges, and the prominence of NSEL

In today’s demanding world it is very necessary for a financial service conglomerate to have an overall portfolio of services. Today’s Investor is not just investing in the traditional mediums like gold, stocks and FD’s but has expanded his portfolio to trade in Commodities &  also currency. 

There are various ways to trade in these markets like Futures trading, Forwards trading and also trading in spot.

In India the regulator SEBI, has authorized commodity Exchanges to trade in Futures and Forwards. The prominent commodity exchanges are MCX , NCDEX. For spot trading the exchanges have set up specialized spot trading entities. The most prominent amongst the spots exchanges in India are National Spot Exchange Limited, NSEL and NCDEX Spot. NSEL and NCDEX Spot compete with each other to again share of the Spot trading market. NSEL is having an overall spread in the Spot markets while NCDEX is focused towards agricultural commodities.

Commodity Trading drives interest from the investors and traders based on the type of commodity:

Precious commodities: Gold commodity trading, Gold Futures, Silver commodity trading etc are a subset of Precious metals commodity basket.

Base Metal Commodities: Trading in metals like Iron, Copper, Nickel, Aluminum, and Zinc are part of Base metal commodity basket.

Agricultural commodity Trading: All Commodity Trading in farm produce of agricultural goods are from the agricultural commodity basket.

Energy commodities: All commodity contracts which are based on on crude oil, heating oil, natural gas and gasoline are Energy Commodities.

SEBI is one of the most dynamic market regulators that the Futures trading market has seen, SEBI is always very agile and vigilant for keeping the market healthy and Scam free and introduces regulations and methods that can develop and grow the market.

Commodity Trading Companies are companies that deal with commodities market. Nowadays, many of these companies are offering traders with several attractive benefits. ABans Commodity (I) Pvt ltd , ACIPL as a commodity trading company relays on latest technology, market research, Information and Innovative trading techniques to keep its customers updated with latest strategies to invest in the market.

ACIPL is the flagship company of ABans Group of companies , which was founded by Mr Abhishek Bansal, Founded in 2005, ABans Group has grown from being a trading house to a dynamic and diversified business group. We provide expertise in Broking Services, Merchant Banking, Non-Banking Financial Dealings, Gold Refining and Realty and Infrastructure. In a nut shell Abans Group is a comprehensive Financial Services and Solution Provider, which aims to provide an end-to-end financial solution to all its clients.

Voluntary Disclosure: ABans Commodity India Pvt Ltd (ACIPL), Founded by Mr. Abhishek Bansal is a SEBI registered Co, ABans Group of Companies, Comprises of companies having businesses like commodity trading, futures trading, gold futures and futures market, operating on platforms like BSEL, MCX, NSEL and more, which constitute the Indian share market.