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Individual investors can buy copper in a variety of forms, including bullion, scrap, coins and financial instruments. Investing in copper can increase the diversity of a portfolio. The price of copper has historically shown little correlation with stock prices, so it can be used to decrease an investor’s exposure to market risk.
One common way to invest in copper is to collect copper bullion, or bars of copper. You can buy these from local and online sources. Check with mints and large-scale jewelers in your area for information on how to buy copper, and also look at bullion suppliers online. The lower prices that online sellers offer may be offset by the shipping costs, depending on where you live. Keep in mind that bullion, because it is a form of copper preferred by investors, is more expensive than the copper for which markets quote prices.
Some investors prefer to collect copper from different sources of scrap metal and melt it down into copper ingots. They may salvage metal from copper wires or old cookware, for example. This copper may be much cheaper than bullion, but it also lacks the guarantees of quality that mints provide. Many copper hunters hoard copper in the form of pennies that were made before 1982, which were pure copper rather than copper-coated zinc. They buy copper pennies with the expectation that the value of the coins will rise as the metal becomes scarcer.
You can buy copper investments without filling your house with copper by investing in copper-based financial products. Individual investors can purchase shares of copper exchange traded funds, or ETFs, which may or may not be physically based. ETFs that are not physically based are composed of shares of stock in copper mining operations and other industries directly linked to copper production. Some major copper traders, like JP Morgan, issue ETFs that are backed by actual supplies of the metal. This allows investors to use financial products to invest in copper more directly than with ETFs that are not physically backed.
Any type of copper investment you hold is worth nothing without a buyer. If demand for copper falls sharply, then neither physical copper nor ETFs will be easy to sell; in normal conditions, however, ETFs may have the advantage. ETFs are, by definition, traded on exchanges, and exchanges exist to match sellers with buyers. Physical copper comes with no such aids to liquidity. If you choose to invest in physical copper, find potential buyers to prepare for the time when you wish to liquidate your copper holdings.
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