Types of investments

Commodity

A basic raw material sold in a standard form around the world, such as oil, iron ore, soybeans, coffee or gold.

Why does it matter?

Commodity prices drive the results of the companies that produce them, like Petrobras, Vale or ExxonMobil, and the costs of the companies that use them.

How do I read it?

These prices are set by world supply and demand and can swing a lot, so the profits of commodity producers often rise and fall in cycles.

Example

When the price of iron ore rises, Vale, one of the world's largest iron ore miners, earns more on every ton it sells, even if it sells the same amount.