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Sean Kemery
Sean Kemery is a former portfolio manager in commodities for
Deutsche Bank AG.
Commodities refer to tangible goods traded in exchanges all over
the world.. They can be a good addition to ones portfolio because
their prices typically move in a direction different from stocks.
They also protect investors from the effects of inflation. Overall,
commodities can be divided into four categories:
1. Energy
Energy commodity values such as the price of petroleum are often
in the public eye. It is perhaps the most popular category, with
two of the top five commodities tied to oil. Other examples of
energy commodities are coal, ethanol, uranium, natural gas, and
renewable energy.
2. Metals
Gold, silver, copper, iron ore, and platinum tend to retain their
value for a long time, essential to electronics and other industries.
Gold, and to some extent silver, is especially popular when the
market is volatile because its value is permanent and easily
liquidated. Investors frequently choose metals when currencies
are devalued, and inflation is pronounced. Steel is another
member of this category; its value generally matches overall
economic performance because of steady demand.
3. Agriculture
These food-related commodities range from corn and wheat to
sugar and cotton. In this group, prices can vary greatly because of
weather conditions, particularly grain harvests. Since food is a
universal necessity, many investors specialize in this category.
4. Livestock
Poultry, pork, cattle, and hogs comprise this group. There is
always a demand for them since they are used in dairy and meat
products. However, prices are prone to wide fluctuations, partly
influenced by milk exports.
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Categories of Traded Commodities

  • 2. Sean Kemery is a former portfolio manager in commodities for Deutsche Bank AG. Commodities refer to tangible goods traded in exchanges all over the world.. They can be a good addition to ones portfolio because their prices typically move in a direction different from stocks. They also protect investors from the effects of inflation. Overall, commodities can be divided into four categories:
  • 3. 1. Energy Energy commodity values such as the price of petroleum are often in the public eye. It is perhaps the most popular category, with two of the top five commodities tied to oil. Other examples of energy commodities are coal, ethanol, uranium, natural gas, and renewable energy.
  • 4. 2. Metals Gold, silver, copper, iron ore, and platinum tend to retain their value for a long time, essential to electronics and other industries. Gold, and to some extent silver, is especially popular when the market is volatile because its value is permanent and easily liquidated. Investors frequently choose metals when currencies are devalued, and inflation is pronounced. Steel is another member of this category; its value generally matches overall economic performance because of steady demand.
  • 5. 3. Agriculture These food-related commodities range from corn and wheat to sugar and cotton. In this group, prices can vary greatly because of weather conditions, particularly grain harvests. Since food is a universal necessity, many investors specialize in this category.
  • 6. 4. Livestock Poultry, pork, cattle, and hogs comprise this group. There is always a demand for them since they are used in dairy and meat products. However, prices are prone to wide fluctuations, partly influenced by milk exports.