Your Copper ETF Basics

If you are looking for some new ETFs to invest in, then you may want to consider joining in a rising and profitable trend, that of copper ETFs. While you might be more familiar with seeing precious metals, such as gold and silver traded on the stock market, copper is a new option that you would be wise to give some serious consideration to investing in.

Copper is a versatile metal that is in high demand, both for its uses in technology and household objects, and as an investment. Copper is used in the making of countless products, from electrical wires to cookware. Americans use up huge quantities of copper every year, and if the rest of the world catches up, there will be a serious deficit in the supply as compared to the huge demand for this metal.

Besides for its many uses, coppers value is also rising due to its potential as currency. China, always a big fan of this metal, has been buying up huge quantities of copper bullion. far greater than the amount that it actually consumes. Speculation has it that China, who has never been thrilled with the economic policy of the US, may be considering switching over to a copper standard. If this would happen, it would of course increase the value of copper tremendously, making this an investment with huge potential.

What Are The Risks With An ETF For Copper?

As with all commodity funds. the value of an ETF is tied to the demand for the particular resource you are investing in. If copper ceases to be used to the extent that it is now, the value of any investment in it will decrease. However, it is difficult to determine if this is in fact likely to occur. For years now, copper has been used in far greater quantities than the natural supply would seem to allow. In fact, it is one of the most recycled metals, with approximately the same quantities of copper being recycled each year as the amount that is mined from copper ore.

However, due to the fact that it is used so widely in housing and in household items, if cheaper alternatives are discovered, or if the demand for housing begins to decrease, the cost of copper and your return on investment could decrease with it.

So is investing in copper a wise move or not? Many would tell you that it is. If you are hesitant to put your money into an ETF that is just based on copper, then you might want to consider an ETF that consists of other metals as well, such as a copper/gold or copper/aluminum combination.

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With the recent drop in copper and oil prices, its easy to be concerned as to whether a copper or crude oil ETF is a wise investment. The July delivery rates for both oil and copper showed a steep decline, with crude oil coming in at just $71.40 a barrel, and copper prices bottoming out [. ]