| When you have some money you want to | | | | goes down. This makes borrowing by a company |
| invest, then you could think of investing in | | | | from the banks or lending institutions very |
| commodity mutual funds. This investment is | | | | expensive because the interest rates goes up. |
| considered potentially rewarding because it has a | | | | This then makes the earnings per share go down. |
| hedge towards inflation. This is to say that the | | | | As an investor, to cushion yourself against this |
| prices of commodities go hand in hand with the | | | | (relation between stocks and commodities), you |
| inflation. This is a fact that makes it more | | | | should invest in commodity mutual funds. You |
| favorable to many investors. | | | | have two options to do this, Oppenheimer Real |
| What is a commodity? This is something that is | | | | Asset Fund and Pimco Commodity Real Return |
| generally grown or comes from the earth e.g. | | | | Fund. |
| wheat, rice, crude oil, minerals and metals, | | | | For the Oppenheimer option, it uses the U.S |
| livestock etc. Some of these commodities are | | | | government inflation protected bonds while the |
| traded in the stock market; they include crude oil, | | | | PIMCO uses non-inflation protected bonds. |
| wheat just to mention a few. Most commodities | | | | Arguably, the Oppenheimer fund gives you a |
| goes hand in hand with the economy of a country | | | | hedge towards inflation. It is also advisable to do |
| and more so the inflation. The commodities are | | | | your research on which other options you might |
| quickly consumed making the price variable. | | | | have before investing in commodity mutual funds. |
| When the inflation rises, the prices for the stocks | | | | |