Money Must Be Linked To Commodities Without Gambling.

　　 Conduct financial transactions Avoid commodity gambling by hooking up commodities

Commodities such as gold, oil, other metals and agricultural products became the focus of investment in 2010. For individuals, the rise in prices of commodities such as oil and agricultural products is bound to increase the cost of living, but it can also take account of the trend and add some commodities related to commodities. Finance Products.

According to the Beijing morning post, large-scale issuance of currency and global markets in the United States Inflation In the context of high pressure, gold, oil, other metals and agricultural commodities became the focus of investment in 2010. After a year of triumph, international commodities suffered a sharp fall this month. However, there are still many people who are optimistic about the medium and long term trend of commodities. For individuals, the rise in prices of commodities such as oil and agricultural products is bound to increase the cost of living, but it can also take account of the trend and add some financial products related to bulk commodities in the portfolio. The most direct way to invest in commodities is commodity futures, but it requires a lot of investors, and most individual investors are not competent. For most people, it is a good choice to properly allocate financial products related to commodities.

Principal safety is the starting point.

There are a wide variety of financial products linked to commodities, both linked to gold and oil prices, but also linked to copper, platinum, agricultural products index and offshore energy shares.

First of all, investors should choose products that can maximize their capital preservation. The reason is very simple. The purpose of bank financing is to take a relatively low risk at the same time and try to get some higher returns. Low risk is the first priority. We must achieve "high risk and high yield" if investors have strong risk tolerance, so they can invest directly in gold or buy gold stocks, energy stocks, resource stocks and agricultural stocks. There is no need to invest indirectly in commodities through banks.

GF issued a gold linked product in early 2010. Within a year, if the gold price rises more than 40% over the initial period, the investor will get a 8% expected rate of return. If the gold price increase does not exceed 40%, the investor can only get the lowest yield of 0.36%.

Obviously, even if the price of gold rises by more than 40%, the investors of the product can only get a 8% yield, which is not as good as buying gold directly. But this product is "defer". If the price of gold falls, investors who buy gold directly may suffer losses, and the investors of the product can not only maintain capital, but also get a 0.36% yield.

Don't be superstitious about banks that sell products.

Is it true that financial products sold by reputable foreign banks will make money? Banks are not gods. They can't step on the drum of the market.

In 2010, it was a big bull market for gold, but the two gold linked products of Bank of China only obtained the lowest income. Among them, the US dollar product stipulates that from May 21st to August 18th, if the gold price is below or equal to a specific price, investors will get a 2.5% expected rate of return (annualized). If the gold price is kept at that particular price for a period of time, the investor can only get a minimum yield of 0.2% (annualized). The provisions of Australian dollar products are similar to those of US dollars, but the expected yield and minimum yield (annualized) are set at 6% and 1%. respectively.

Obviously, this product is betting that the gold price will be callback, and investors will be able to get the expected return if they fall below a specific price in 3 months. At that time, the bank's product manuals expressed optimistically that "the probability that the expected revenue could not be realized was very low". However, the very low probability finally became a reality. The price of gold did not fall below a specific price in 3 months, and only the lowest yield was achieved.

See the odds of gambling.

Structured financial products are much like gamble. Investors should see clearly what they are gambling and see how big the odds are. For example, the A product has a 20% probability of achieving a 10% yield, but a 80% probability achieves a minimum yield of 1%. The B product has a 60% probability of achieving a 6% yield and a 40% probability of achieving a 1% minimum yield. Prudent investors should choose B. Although the expected rate of return is 40% lower than that of A, the probability of achieving the expected rate of return is 3 times that of A.

The reality is more complex and hard to compare, but some of the odds can be seen clearly. For example, a commodity is in a bull market, but the terms of a related financial product stipulate that if the price of the commodity breaks a specific price in the next year, the financial product can only get the lowest income. Financial products gamble that the goods can not rise over a specific price. The bull market is not at the top, and the financial product is actually betting against the potential, and its odds are doubtful.

The price of a product issued by the Bank of Holland in 2009 will not exceed $120 / ounce, but the actual increase is far more than this figure, resulting in zero profit.