is copper a good investment?

Question

I'm looking for a good investment and was wondering about the future of copper or copper bouillon as an investment. I know gold is, but that can be quite pricey. Thanks.

Answer 1

Copper is an industrial commodity...primarily used (but not limited to) the transmission of electrical current, be it wires in your home, electronic appliances, transmission cables etc. Copper pipe is also used in home water systems.



You don't buy COPPER BULLION to keep...the futures market for copper is based on industrial consumption not a fear of inflation.



If you are interested in Copper you are interested in sources of copper for industry...usually that means copper mines and businesses associated with copper mining.



The price of copper is also used as a bellwether of industrial growth. Rising copper prices mean that the available supple of the metal is in demand for industrial purposes...so when you see that the price of copper is rising it often means good times ahead industrially (or China is storing the metal for future use :) )



right now the price of copper is quite low as can be seen in this chart from Kitco Metals



http://www.kitconet.com/charts/metals/base/spot-copper-1y-Large.gif



Does that mean Copper mining stocks are a buy now??? Depends on your feelings on the industrial future in the world....if you believe that the world's problems are solved and industrialization will get a lift....perhaps it is worth looking at mining of Copper and buy stocks in that mining commodity at a low price...once the the demand for copper increases their stocks will be worth more for sure....



But if the price of copper falls further then stock in those mines will be cheaper to buy.



Whenever buying a commodity stock....always look at the value of the commodity as it will lead the price of the company associated with the commodity...can go for gold too but Gold mines are an exception since their price does not seem to follow this rule very well.



So...NO...you don't buy copper BULLION....as such....You can look at copper futures and buy contracts for delivery, or invest in mines producing copper or simply use it as an indication of the industrial health of the world.

Answer 2

Is Copper A Good Investment

Answer 3

Copper is still a commodity. A pound of copper will still be a pound of copper but a share of Apple in 1996 is very different from a share of Apple today.



Investments are supposed to improve in value. An investment in a company is an investment in a business intended to make a profit, so long as it makes a profit, the investment improves in value so investments in companies are designed to improve in value. An investment in a metal is an investment in storage costs and in a spread, there is no natural reason for an improvement in value other than perhaps some industrial demand for which there's plenty for copper. Essentially metals are not investments, they may have a place in a portfolio to adjust risk but they by themselves are not an investment.



Note that although gold's price is high, had you bought gold 30 years ago, you would've made 2.33% per year on it all while the stock market returned 18% to 22% per year, Coca-Cola returned 13.5% per year over those 30 years.

Answer 4

Agree with what John said..



And, no of course you can't invest in copper bullion. Copper sells for $3.40/lb. That means to make a significant investment in copper you need tons of it. What are you going to do, put it in your back yard?



Then there's the what are you going to do with it to make money question. Suppose Copper goes up to $5/lb and you want to sell the copper you have stacked in your backyard. Who is going to buy it? The junk dealer who will give you $3.40/lb and charge you to haul it away.



You could invest in copper by buying LME or COMEX copper contracts, but they don't look very bullish to me. I'll bet big that you have never traded a futures contract in your life.



Edit: @underexposed - That stuff about looking at commodity prices before looking at commodity stocks. I believe that there would be a huge market for a fund that trades mispricings between commodity stocks and commodity futures prices. I'm sure I could raise $100M for such a fund pretty easily if I could get a product together. I can't and I have tried hard. I think the daance between those is really complicated. If you can show me real numbers and defined trades (like aa mechanical system), I would be very interested and pay you well.



Note that such a fund would be really low risk (presumably) and uncorrelated with both stocks and commodities. There would be huge market for it. I know people who would allocate to it immediately.

Answer 5

Well

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Answer 6

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RE:

is copper a good investment?

I'm looking for a good investment and was wondering about the future of copper or copper bouillon as an investment. I know gold is, but that can be quite pricey. Thanks.

Answer 7

There's a difference between investments for gain and investments for preservation of wealth.



Sure, you can cite impressive returns for stock compared to hard assets, but Apple, Coke or any other stock investment will be worthless during a calamitous financial collapse. THAT is the best reason to hold gold, silver or any other hard commodity. Even cash currency can go worthless, but the world has never seen an age where gold and silver were not universally accepted as barter.

Answer 8

Copper isn't really so good to invest in.

Silver is what you want to go with, and it's not too expensive.

Answer 9

1. how would anyone who is on these forums really have any clue? all investments are forward looking -- and, quite frankly, all precious and non-precious metals looks to me as though the time to buy was several years ago.



2. if someone here did have an inside clue -- why would they tell you? they aren't your best friend, you aren't family, and you're not paying them.



ergo, i conclude that any advice you get here is fatally flawed. it would seem very likely that if you follow the thoughts here, you'll lose.

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