What Are the Benefits of Investing in Commodities?

Investment refers to the process by which a country, an enterprise, or an individual signs an agreement with the other party to promote social development, realize mutual benefit, and transfer funds for specific purposes. It is also the economic behavior of a specific economic subject to invest a sufficient amount of funds or physical currency equivalents into a certain area in a certain period in order to obtain income or increase capital in the foreseeable future. Can be divided into physical investment, capital investment and securities investment. The former is invested in the enterprise with currency, and a certain profit is obtained through production and operation activities, and the latter purchases the stocks and corporate bonds issued by the enterprise with currency, and indirectly participates in the profit distribution of the enterprise.

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Investment

The term investment is in

Investment refers to an investor who invests a certain amount of funds in the current period and expects to obtain a return in the future. The return should be able to compensate:

(1) the time when investment funds are occupied;

(2) Expected inflation rate;

(3) Uncertainty of future earnings. (CFA definition)

The investment activities of enterprises are clearly divided into two categories:

(1) Laying the foundation for domestic expansion and reproduction

Choose according to your own strength and judgment. No one can be sure that the investment will be successful. Investment is risky and financial management needs to be prudent.

1. Investment is transfer

1. The impact of investment on economic growth

The relationship between investment and economic growth is very close. In the field of economic theory, the West and China have a similar view that economic growth is mainly determined by investment, and investment is the basic driving force of economic growth and a necessary prerequisite for economic growth. The impact of investment on economic growth can be analyzed from factor inputs and resource allocation.

2. Investment is the main factor in promoting technological progress

Investment has a great impact on technological progress. On the one hand, investment is the carrier of technological progress, and any application of technological achievements must be reflected through certain investment activities. It is the link between technology and the economy; on the other hand, technology itself is also an investment structure. These technical achievements are the products of investing a certain amount of human capital and resources (such as test equipment, etc.). The production and application of technological progress are inseparable from investment.

There is no development without investment. Investment is the only way to find new profit opportunities, and it also runs through the enterprise's operation: "Investment in new projects,

According to the latest survey results of the China Securities Journal, the investor confidence index in November was 55.6, a year-on-year increase of 12.1%, and a month-on-month decrease of 4.3%.

Among the various sub-indices, except for the international economic and financial environment index which rose by 1.2 month-on-month in November, all other sub-indices decreased. Among them, the domestic economic fundamentals index and domestic economic policy index fell by 2.5 and 2.0 respectively, the broader market optimism and broader market decline index fell by 4.6 and 2.0, and the broader market rebound and buying index fell by 1.6 and 2.7 respectively. The survey report believes that although the confidence index has declined slightly, it has remained stable, and investor sentiment has always been optimistic, and there have been no major fluctuations.

The survey shows that 40.21% of the respondents believe that the Shanghai Composite Index will rise in the next 3 months, and 33.99% believe that it will rise in the next 1 month. In the next 3 months, 27.40% of the respondents consider increasing the amount of funds invested in stocks, which is basically the same as in October. In November, the international economic and financial environment index was 44.5, an increase of 1.2 from the previous month and an increase for the fourth consecutive month.

Private investment is accelerating, and its share in social investment is approaching

Efficient Market Hypothesis (EMH)

In 1965, Eugene Fama, a professor of finance at the University of Chicago, published a paper entitled "Price Behavior in the Stock Market", deepened the theory in 1970, and proposed the efficient market hypothesis ( Efficient Markets Hypothesis (EMH). The efficient market hypothesis has a questioned premise that investors participating in the market are rational and able to respond quickly and reasonably to all market information. The theory holds that in a stock market with sound laws, good functions, high transparency, and sufficient competition, all valuable information has been timely, accurately, and fully reflected in the stock price trend, including the current and future value of the enterprise, unless there is a market Manipulation, otherwise it is impossible for investors to obtain excess profits higher than the market average by analyzing past prices.

Behavioral Finance (BF)

In 1979, Daniel Kahneman, a professor of psychology at Princeton University, and others published an article entitled "Expectation Theory: Decision Analysis in a State of Risk", establishing a psychological theory of the human risk decision process. Become a milestone in the history of behavioral finance.

Behavioral Finance (BF) is a comprehensive theory that organically combines finance, psychology, and anthropology, and tries to reveal the irrational behavior and decision rules of financial markets. The theory holds that stock prices are not only determined by the intrinsic value of the enterprise, but are also largely affected by the behavior of investors, that is, investor psychology and behavior have a significant impact on the price decision and changes in the securities market. It is a theory corresponding to the efficient market hypothesis, and its main content can be divided into two parts: arbitrage limitation and psychology.