4 ms·
"define: commodity" on Google gives me: "a raw material or primary agricultural product that can be bought and sold, such as copper or coffee." By this definiti
by ahomescu1 13y ago
"define: commodity" on Google gives me: "a raw material or primary agricultural product that can be bought and sold, such as copper or coffee." By this definition, "commodities" are also materials that can be processed into something more complex, adding value, which makes them great investments. That's not why people usually buy a house.
- aidenn0 13y agoI disagree. Commodities derive value from 2 things: 1) Usefulness 2) Scarcity Something useless and abundant has little value, something very useful and scarce has high value. A house is useful (it's a place to live, with varying personal usefulness based upon geographic location; a house 3 states away from my job is personally not very useful to me, for example) and scarce for any given geographic location. The fact that copper is useful because you can build stuff out of it, while houses are useful because having a place to live is useful is irrelevant. [edit] And the both the usefullness and scarcity of houses can change (just like with copper). Someone comes up with a cheaper way to mine copper? Price drops. A locality loosens their zoning laws? Price drops. Someone finds a new, valuable use for copper? Price rises. Big tech boom in the bay area? Price rises.
- encoderer 13y agoBut that's not at all what fuels the commodity market! People "invest" in precious metals so they can convert them into something else? Anyway, I'm done with this discussion. Feel free to have the last word. It's clear to me that you've made-up your own definition of 'investment' and cannot see past that. Totally your right. But for the rest of us, here's what investment means: investment noun : the outlay of money usually for income or profit : capital outlay; also : the sum invested or the property purchased