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Investments have always been an important part of life. It is not merely enough to get a job with a high paying salary, it is equally important to make sure that the money you earn grows over time. If it is kept stored away in a savings account, it will earn the bare minimum in terms of savings. Hence, people are constantly looking for new avenues where they can invest. The key to success in the markets is to diversify. This means that you should create a balance of safe and secure investments. Additionally, you must also expand your horizons and try your hand at stocks, bonds, real estate and other assets. In this manner, you can make sure that you always have a steady flow of income. In a bid to branch out and find the perfect balance, people start investing in commodities. This is a little different from the regular stock market and comes with its own set of benefits. A number of traders have found it profitable on one hand and relatively risk free on the other. But a number of people are not aware of this option and do not understand exactly how it works. So let us get into the details of commodity trading. So where are these commodities bought and sold and what is NCDEX? Like the National and Bombay Stock Exchange, commodities are traded in a market of their own. It is called National Commodity & Derivatives Exchange Limited (NCDEX). Here traders can buy and sell commodities online, in an easy and stress free manner. There are around 34 commodities that can be traded in this market. They include 23 agricultural goods, 1 polymer, 2 energy, 6 precious metals and 2 other metals. These commodities can be purchased over the internet as and when the market conditions are favorable. So what are the benefits of this kind of trading? 1. Stable Market Conditions In this market, the price of the commodities is directly determined by the demand and supply in the market. Hence it is relatively easy to predict market fluctuations and make purchases accordingly. Thus, this market is more stable than the stock market, resulting in an investment that is not too risky. 2. Liquidity In order to buy and sell stocks, a large amount of money is required. This is makes it difficult to maintain liquidity and make quick trades. However, this is not the case with the commodity market, it is relatively easy to trade here and the amount to be invested is not too high. 3. Diversification As mentioned earlier, this is a great way to diversify your investment portfolio. A well-rounded range of investments will help you to gain a steady income through investments. In a bid to do this, a number of people turn to this market. 4. Cost Effective Trading in the commodity market can start as low as five thousand Rupees. The cost of precious metals is considerably higher, but it is affordable to trade in agricultural products. Thus, it is easy to enter the market and make trades, without the fear of major financial losses. Thus, if you are looking for new areas to invest in, it would be advisable to give commodity trading a chance. If you get it right, you could find a goldmine here.
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