Using stock markets in Europe, how can I buy commodities / resources, to diversify my portfolio?
"I recommend avoiding trading directly in commodities futures and options.  If you're not prepared to learn a lot about how futures markets and trading works, it will be an experience fraught with pitfalls and lost money – and I am speaking from experience. Looking at stock-exchange listed products is a reasonable approach for an individual investor desiring added diversification for their portfolio.  Still, exercise caution and know what you're buying. It's easy to access many commodity-based exchange-traded funds (ETFs) on North American stock exchanges.  If you already have low-cost access to U.S. markets, consider this option – but be mindful of currency conversion costs, etc. Yet, there is also a European-based company, ETF Securities, headquartered in Jersey, Channel Islands, which offers many exchange-traded funds on European exchanges such as London and Frankfurt.  ETF Securities started in 2003 by first offering a gold commodity exchange-traded fund. I also found the following: London Stock Exchange: Frequently Asked Questions about ETCs.  The LSE ETC FAQ specifically mentions ""ETF Securities"" by name, and addresses questions such as how/where they are regulated, what happens to investments if ""ETF Securities"" were to go bankrupt, etc. I hope this helps, but please, do your own due diligence."
Technically, you could improve your odds in this hypothetical pre-apocolyptic economy by diversifying your digital and tangible precious-metal-commodity portfolio by going in with gold, silver, platinum, palladium, and others.   That being said I'm not sure if one can access tangible stores of all these metals... comments discuss investing in potato futures. Learn / ready about commodity trading or commodity futures. An investopedia article How To Invest In Commodities is a good start.  There are quite a few commodities offered for normal trade or as futures. Potatos may not be offered on quite a few exchanges. Found some here Investing in commodities is fraught with quite a bit of risk, some like you have already pointed out. Of course you can't eat all and have to sell. "As Dilip has pointed out in the comment, investing in commodities is to either delivery or Buy. Lets say you entered into buying ""X"" quantities of Soybeans in November, contract is entered into May. In November, if the price is higher than what you purchased for, you can easily sell this, and make money. If in November, the price is lower than your contract price, you have an option to sell it at loss. If you don't want to sell it at loss, you are supposed to take the physical shipment [arrange for your own transport] and store it in warehouse. Although there are companies that will allow you to lease their warehouse, it very soon becomes more loss making proposition. By doing this you can HOLD onto as long as you want [or as long as the good survive and don't rot] It makes sense for a large wholesaler to enter into Buy contracts as he would be like to get known prices for at least half the stock he needs. Similarly large farmers / co-operative societies need to enter into Sell contracts so that they are safeguarded against price fluctuations." This conversation is about energy futures, not generic securities. A moderately wealthy dilettante without a background in the subject is at an extreme disadvantage - since as a trader your edge is being able to identify market inefficiencies and profit from them, it's difficult to imagine being able to do this in a market you do not understand. Depending on your broker, you can buy these stocks directly at the most liquid local exchanges. For instance, if you are US resident and want to to buy German stocks (like RWE) you can trade these stocks over InteractiveBrokers (or other direct brokers in the US). They offer direct access to German Xetra and other local markets. Most investors should not be in individual stocks. The market, however you measure it, can rise, yet some stocks will fall for whatever reason. The diversification needed is to have a number of shares of different stocks, and that a bit higher than most investors are able to invest and certainly not one starting out. I suggest you look at either mutual funds or ETFs, and keep studying. (I'm told I should have offered the UK equivalent Investment Trusts , OEIC, or Unit Trusts) I don't think so.   The market would need to be either very big or be key pillar of the commodities market which won't happen.   Now if they force domestic consumers (Sinopec) to start using this for hedging than maybe. I agree with buying gold, as this is truly the worldwide currency and will only increase in value if the Euro fails. The only issue will be if your country confiscates all citizen's gold ( it has happened many times throughout history.  As for ETFs, be careful because unless you purchase these in terms of other currencies (I am assuming you aren't), than the ETF you own is still in terms of Euros, making the whole investment worthless if you are trying to avoid Euro currency risk. Diversification is a risk-mitigation strategy. When you invest in equities, you generally get a higher rate of return than a fixed income investment. But you have risks... a single company's market value can decline for all sorts of reasons, including factors outside of the control of management. Diversification lets you spread risk and concentrate on sectors that you feel offer the best value. Investing outside of your currency zone allows you to diversify more, but also introduces currency risks, which require a whole other level of understanding. Today, investing in emerging markets is very popular for US investors because these economies are booming and US monetary policy has been weakening the dollar for some time. A major bank failure in China or a flip to a strong dollar policy could literally implode those investments overnight. At the end of the day, invest in what you understand. Know the factors that can lower your investment value. If you want to make money while European equities markets are crashing and the Euro itself is devaluing: None of these strategies are to be taken lightly. All involve risk. There are probably numerous ways that you can lose even though it seems like you should win. Transaction fees could eat your profits, especially if you have only a small amount of capital to invest with. The worst part is that they all involve timing. If you think the crash is coming next week, you could, say, buy a bunch of puts. But if the crash doesn't come for another 6 months, all of your puts are going to expire worthless and you've lost all of your capital. Even worse, if you sell short an index ETF this week in advance of next week's impending crash, and some rescue package arrives over the weekend, equity prices could spike at the beginning of the week and you'd be screwed. "Over on Quantitative Finance Stack Exchange, I asked and answered a more technical and broader version of this question, Should the average investor hold commodities as part of a broadly diversified portfolio?  In short, I believe the answer to your question is that gold is neither an investment nor a hedge against inflation. Although many studies claim that commodities (such as gold) do offer some diversification benefit, the most credible academic study I have seen to date, Should Investors Include Commodities in Their Portfolios After All? New Evidence, shows that a mean-variance investor would not want to allocate any of their portfolio to commodities (this would include gold, presumably). Nevertheless, many asset managers, such as PIMCO, offer funds that are marketed as ""real return"" or ""inflation-managed"" and include commodities (including gold) in their portfolios.  PIMCO has also commissioned some research, Strategic Asset Allocation and Commodities, claiming that holding some commodities offers both diversification and inflation hedging benefits." If you're referring to investment hedging, then you should diversify into things that would profit if expected event hit. For example alternative energy sources would benefit greatly from increased evidence of global warming, or the onset of peak oil. Preparing for calamities that would render the stock market inaccessible, the answer is quite different.  Simply own more of things that people would want than you need.  A list of possibilities would include: Precious metals are also a way to secure value outside the financial markets, but would not be readily sellable until the immediate calamity had passed. All this should be balanced on an honest evaluation of the risks, including the risk of nothing happening.  I've heard of people not saving for retirement because they don't expect the financial markets to be available then, but that's not a risk I'm willing to take. The best way to start out is to know that even the experts typically under-perform the market, so you have no chance.  Your best bet is to invest in diversified funds, either through something like Betterment or something like Vanguard's ETFs that track the markets.  Buying individual stocks isn't typically a winning strategy. "I would just buy one ETF (index-fund) on the market you think will perform better. It will take care to buy the 5 most solid stock in this market and many other more to reduce the risk to the bear minimum. You will also spend only few bucks in comissions, definitely less than what you would spend buying multiple stocks (even just 5). It's hard enough to forecast which market will perform better, it's even harder to do stock picking unless you have the time and the knowledge to read into companies' balance sheets/economic incomes/budgets/market visions etc. And even if you are great in reading into companies balance sheets/economic incomes/budgets, the stock market usually behaves like a cows' drove, therefor even if you choosed the most valuable solid stocks, be prepared to see them run down even a 50% when all the market runs down a 50%. During the 2008 crisis the Europe market has lost a 70%, and even the most solid sectors/stocks like ""Healthcare"" and ""Food & Beverage"" lost a painful 40% to 50% (true that now these sectors recovered greatly compared to the rest of the market, but they still run down like cows during the crisis, and if you holded them you would have suffered a huge pain/stress). But obviously there's always some profet/wizard which will later tell you he was able to select the only 5 stocks among thousands that performed well." "And you have hit the nail on the head of holding gold as an alternative to liquid currency. There is simply no way to reliably buy and sell physical gold at the spot price unless you have millions of dollars. Exhibit A) The stock symbol GLD is an ETF backed by gold. Its shares are redeemable for gold if you have more than 100,000 shares then you can be assisted by an ""Authorized Participant"". Read the fund's details. Less than 100,000 shares? no physical gold for you. With GLD's share price being $155.55 this would mean you need to have over 15 million dollars, and be financially solvent enough to be willing to exchange the liquidity of shares and dollars for illiquid gold, that you wouldn't be able to sell at a fair price in smaller denominations. The ETF trades at a different price than the gold spot market, so you technically are dealing with a spread here too. Exhibit B) The futures market. Accepting delivery of a gold futures contract also requires that you get 1000 units of the underlying asset. This means 1000 gold bars which are currently $1,610.70 each. This means you would need $1,610,700 that you would be comfortable with exchanging for gold bars, which: In contrast, securitized gold (gold in an ETF, for instance) can be hedged very easily, and one can sell covered calls to negate transaction fees, hedge, and collect dividends from the fund. quickly recuperating any ""spread tax"" that you encounter from opening the position. Also, leverage: no bank would grant you a loan to buy 4 to 20 times more gold than you can actually afford, but in the stock market 4 - 20 times your account value on margin is possible and in the futures market 20 times is pretty normal (""initial margin and maintenance margin""), effectively bringing your access to the spot market for physical gold more so within reach. caveat emptor."