Introduction to Equity and Commodities

Equity represents ownership in a company. Shareholders gain profits through dividends and stock appreciation. Companies issue shares to raise capital, and ownership can influence corporate decisions through voting rights.

Commodities are raw materials like gold, oil, and wheat. Traders buy and sell based on supply-demand dynamics. These are often used as hedges against inflation and are traded on exchanges via futures contracts.

Equity investments are influenced by company performance, market conditions, and economic factors. Commodities are more sensitive to geopolitical events, weather patterns, and supply chain disruptions, making them potentially more volatile.

Equities are typically suitable for long-term investments, benefiting from compound growth. Commodities, however, are often used for short-term trading strategies due to their price volatility and lack of long-term growth potential.

Including both equities and commodities in a portfolio can enhance diversification. Commodities often have low correlation with stocks, providing a hedge against market downturns and adding resilience to the investment strategy.

Some stocks in the 1800s traded for as low as a few cents, but now are worth billions, reflecting exponential market growth.