Are you looking for a place to invest your money? Aluminum probably isn’t the first thing that comes to mind, but it requires careful consideration. The bauxite ore used to produce aluminum metal is one of the most abundant materials found in the earth’s crust. Construction, electronics, aerospace, and other manufacturing entities across numerous industries widely use refined aluminum when crafting their products.
From an investment perspective, aluminum closely follows the changes impacting the industries that use the metal in their day-to-day production processes. Consequently, it’s relatively easy to track aluminum prices and determine the right time to make a profitable trade.
Investors who wish to allocate funds to aluminum have several options. For those looking to minimize their risk, purchasing stock in leading global aluminum manufacturers such as Alcoa or Aluminum Corporation of China offers a relatively safe long-term investment solution. You can also consider buying stock in companies involved in mining bauxite and refining aluminum, like Rio Tinto and Norsk Hydro. Exchange-traded funds (ETF) provide another alternative for risk-averse investors. An ETF is similar to a mutual fund, with the primary difference being that they’re bought and sold throughout the trading day instead of at the day’s end. One of the most significant advantages of investing in aluminum via ETFs is the increased access to foreign markets.
You could also choose to invest in aluminum futures, which are commodities traded on the New York Mercantile Exchange. Futures contracts are more complex than stocks or ETFs and require extensive market knowledge. They also come with a much higher risk level. Commodities investors must be able to tolerate the extreme price volatility that often results in substantial gains or losses in a short time.
If you’d like to invest in aluminum commodities, you’ll need to apply for futures privileges in your current brokerage account or open an account with a futures firm.
Reasons to consider investing in aluminum include:
High demand. The demand for aluminum products should continue to increase for the foreseeable future and yield solid results for long-term investors.
Simplified monitoring. The relatively easy tracking of aluminum prices enables investors to determine the right times to execute their transactions.
Longevity. Aluminum is a time-tested material that provides investment stability. Alcoa, for example, traces its aluminum manufacturing roots to the late 19th century.
Access to information. Resources to help you make informed aluminum investing decisions are readily available.
If you’d like to invest in aluminum but aren’t sure how or where to start, intelligence from HARBOR Aluminum can help. We’re an independent and specialized research firm focusing on the aluminum market. Count on us for a wealth of informative reports, analyses and other valuable resources to guide you. Our expert aluminum funds industry consultants are available to help you develop and implement a sound investment strategy. Subscribe for daily market insights and trends data for HARBOR Aluminum, our detailed and accurate information will help you make infromed decisions.
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