Investing money into the commodity market can be pretty profitable if you do it right. What are commodities? Simply put they are things that have limited supply, but an ever growing growth in demand.
Things like water, gold, silver, corn, and cattle would all be considered commodities and they all offer a way to trade them.
You can trade a commodity by buying a future contract. Here is how it works.
Farmer John needs money now, but does not have anything to sell. He does however expect to have 100 bushels of corn in the next 2 months. He can choose to sell a futures contract on that corn. In other words he sells someone else the corn, but it does not get delievered until the future contract expires 2 months down the road. Anyone can go out and buy these contracts. The contracts are then constantly affected by the demand of the contract.
Of course if you are just taking part in trading commodities you do not want to receive that 100 bushels of corn, so instead of holding it all the way through till you receive the commodity you can always sell it in advance.
The idea behind buying and selling commodities is that you can buy a future contract as the commodity is about to increase and sell it at a later date for a profit.
Obviously this is not long term investing. If you hold a contract for too long it will end up expiring and you will have a ton of corn lying around the house.
So before you buy a commodity or start looking at trading commodity options it is important to have a firm understanding of how to make money in the short term. It can be a very profitable market place, but it is not really the best place to start if you are just learning.