Introduction
Copper is the third most used metal in the world. It is believed to have been used for more than 10.000 years because of its highly malleable nature and high thermal and electrical conductivity.
The metal copper is used in everything from construction to electronics. It is a crucial part of the economy and can be a lucrative investment.
At the turn of the 20th century, copper was one of the most valuable metals. During the early 2000s, it experienced a decline in prices due to increased supply, but this trend has since reversed itself.
The price of copper has steadily increased over the past decade, and it continues to do so. Investors are looking to copper as a valuable commodity once again.
Copper is an essential part of modern life. It is used in everything from electrical wiring to plumbing pipes, air conditioners, appliances, cars, and more. Copper’s durability makes it a strong metal that is easy to work with — it does not easily corrode or rust.
In this article, we will answer all of your questions about how to invest in copper and examine the following topics:
-Why invest in copper
-Investing in actual copper (billions, coins)
-Investing in copper financial assets (mutual funds, futures, ETFs, mining stocks)
-Should I invest in copper
Why invest in copper
Copper is one of the best investments in metals that you can make. The infrastructure, homes, hospitals, and transportation vehicles cannot be built without copper.
It plays a vital role in our homes and vehicles as well. Do not forget that it is also an important ingredient in manufacturing solar panels.
Some people use copper and other commodities for hedging or diversification purposes. Investing in copper is a good choice for diversifying your portfolio.
Several investors believe that by adding these assets to their portfolio, they can reduce the risk of losing money due to an economic downturn in one category.
There are multiple ways to invest in copper either directly – physical copper – or indirectly via ETFs, futures, or stocks.
You can buy individual copper coins and bars. Buying physical bullion is one way to invest in copper; however, coins may have low liquidity and bars may be difficult to resell at a later date if you need cash quickly.
Another option is to invest in mutual funds or exchange-traded funds (ETFs)
The main topic we will discuss in this article is how to invest in copper.
To decide which strategy is best for your investment goals, you can see below the best 6 copper investment strategies:
- Copper bullions
- Copper coins
- Copper ETFs
- Copper mutual funds
- Copper futures
- Copper mining stocks
Investing in actual copper
Copper is a super-abundant resource, and one of the most widely used industrial metals. It is used in construction, refrigeration, plumbing, and communications.
While there are numerous options when it comes to investing in copper, not all are created equal. That’s why it is important to consider which options best suit your needs as an investor.
Some investors choose to purchase physical copper products such as bars, ingots, or coins.
The advantage of investing in actual copper products is that you hold the metal itself. This means you can store it yourself or have it stored for you.
You can also sell it immediately after purchase should you decide to do so.
However, physical copper investments often involve significant fees for storing and selling the metal.
Below you can explore the two main forms of physical copper that you can invest in.
Copper coins
Copper bullion is an investment vehicle that allows you to own the physical commodity copper. You do not need to be an expert to invest in copper, and there are many ways to do so.
Many investors prefer coins because they are easier to store and sell than their larger counterparts. Copper coins come in many different sizes, shapes, and designs. Additionally, some countries produce legal tender coins that have face values—for example, US pennies have a face value of one cent.
The value of a copper coin is determined by its weight and purity level; the higher the purity level, the higher the price per troy ounce.
You can invest in copper bullion coins such as the American Eagle or Canadian Maple Leaf coins. These coins are minted by governments and contain a specific amount of pure metallic copper set by their respective countries’ mints.
The United States Mint first issued the penny in 1793. The 1-cent coin is still issued today, but the penny has lost much of its value due to inflation.
The US Mint also issues coins that contain copper as a small part of the whole coin; they issued copper-clad zinc pennies from 1982 through 2006.
The Canadian mint also produced a 1-cent coin that contained 99.9% pure copper from 1997 to 2000, and again in 2011. Some coins minted in other countries contain a small percentage of copper as well.
Copper bullion
If you want to own larger quantities of copper bullion (e.g., more than 20 ounces), then you should consider investing in ingot or bar form instead of coins. Ingots and bars are sold by weight and purity level; they are typically much more affordable than coins per troy ounce.
Like coins, bars and ingots come in many different sizes, shapes, and designs. Additionally, the larger the size of a bullion bar or ingot—up to 1000 ounces—the lower its price per troy ounce. These investments are more expensive to store than coins because you may have a difficult time finding a proper storage location.
The two most important factors to consider when investing in copper bullion are purity and liquidity.
You can invest in copper that is 99 percent pure or 99.9 percent pure, but the higher the purity level, the higher the price per ounce. Most investors invest in copper at 99.9 percent for this reason.
The second factor is liquidity, or how quickly you can buy or sell your copper to other investors. Due to the physical size of coins and bars, they are considered less liquid than futures contracts.
Copper coins are generally more liquid than ingots and bars because it is easier to store them in smaller places such as safety deposit boxes.
Investing in copper financial assets
Another way to invest in copper is by investing in financial assets that invest directly or indirectly in copper companies.
In this section, we will show you the best methods to invest in copper by investing in financial instruments.
We will examine ETFs, mutual funds, mining stocks, and copper futures in detail to assist you to figure out which strategy is best for you.
Copper ETFs
Copper ETFs (exchange-traded funds) give you exposure to the price of copper without having it in your possession.
These funds allow for quick trading and low management fees, making them a popular choice among investors who trade often but do not want all their assets tied up by one single position at any given time, which means these types can certainly help build better diversification into other markets as well.
Copper ETFs are sold on the market’s exchanges just like stocks. They are traded through brokerage accounts directly with the issuer or other financial institutions.
Some of the most famous copper ETFs are the following:
United States Copper Index Fund (CPER) ETF: The portfolio of CPER consists of copper futures contracts.
Global X Copper Miners ETF (COPX): The COPX ETF provides investors with access to a diverse range of copper mining companies.
iPath DJ-UBS Copper Total Return Sub-Index ETN (CUPM): CUPM invest in a portfolio of futures contracts, options, and forward positions.
If you are interested in how to invest in copper through ETFs check out the following providers
| Logo | Broker | EconAlert Rating | Fees | Account Minimum | Vist Website |
 | Saxo Bank | 5 | $0 | $0 | Learn More |
 | Interactive Brokers | 5 | $0 | $0 | Learn More |
 | E*Trade | 4.8 | $0 | $0 | Learn More |
 | TD Ameritrade | 4.8 | $0 | $0 | Learn More |
 | J.P. Morgan W. M. | 4.7 | $0 | $0 | Learn More |
Table 1. Econalert’s rating are determined through a multivariable algorithm by the investment department of Econalert.
Copper mutual funds
Mutual funds invest your money into a diversified portfolio of assets according to an asset allocation strategy selected by the fund’s manager. This means that copper mutual funds invest in a variety of assets such as bonds, stocks, and real estate to meet the fund’s objectives.
If you invest in a mutual fund, not only will your money be exposed to the price of copper but also the performance of other financial assets.
It is important to consider that mutual funds invest in stocks too, so you must invest in funds with low stock risk.
One of the best copper mutual funds is the PIMCO Dynamic Copper Fund (COPX). This fund’s objective is to invest in units of COPX.COM, an ETF that invest in the performance of copper futures. COPX offers investors daily liquidity to invest in the commodity markets.
Copper futures
A copper future is an agreement involving a standard amount of copper to be delivered at a specified price on a standard date in the future. This is similar to how you invest in copper coins, except that futures are traded through commodity exchanges.
One of the most famous copper futures is the following:
CME/COMEX Copper: The product is traded in the form of futures contracts and provides access to invest in copper prices.
Futures in copper are more complex since the trader must actively manage positions. They are regarded as a more advanced way to trade.
Copper mining stocks
Copper mining stocks invest in shares of copper mining companies that develop, produce and sell copper.
The main advantage of investing in mining companies is that they provide exposure to traditional sectors such as energy and materials, while also diversifying the risk associated with investing in a single sector.
There are several mining companies where copper is a significant part of their businesses, including the following:
Freeport-McMoRan Inc. – Freeport-McMoRan mines copper in Indonesia and Chile and is the largest independent copper producer in the world.
Barrick Gold – This mining company produces copper and gold and has mines in Peru, Chile, USA, Canada and Australia.
Teck Resources Limited – Teck is a Canadian mining company that produces copper among other metals.
Should I invest in copper?
Copper has many unique properties that make it a smart investment. It is durable, does not corrode easily, and can be recycled over and over again without losing any of its quality.
The price of copper also fluctuates with the global economy which can give investors an opportunity to make money on their investment.
The price of copper has been on a steady rise in the past few years. Copper has become a popular investment choice among many people, as it has been predicted to keep rising in price over time.
However, investing in copper can be risky because it is volatile and unpredictable.
The price of copper can also be affected by other factors that are outside of one’s control.
Investing in copper can pay off if you invest in the right way and only invest the amount of money that you can afford to lose.
As with any investment, investing in copper is a decision that should be made after careful consideration.
You may evaluate the different sorts of copper investments we have covered above and discover which one meets your financial objectives. And in the end, the decision on how to invest in copper and what is the best method will be yours only.