{"concept":{"id":10,"slug":"commodity","term":"Commodity","shortDefinition":"A basic physical good, generally interchangeable between different producers -- oil, gold, wheat, copper. Its return depends solely on the change in its own price.","longDefinition":"Unlike a share, a commodity generates no profits and pays nothing out: it pays no dividends or interest. Its price is set by physical supply and demand for the good itself -- how much is produced, how much is consumed, and expectations about both. It trades on its own markets, separate from the stock and bond markets."},"relations":{"requirement":[],"contrast":[],"related":[{"concept":{"id":2,"slug":"financial-market","term":"Financial market","shortDefinition":"A mechanism that connects those with savings available to those who need financing, through the exchange of financial assets (stocks, bonds, currencies, among others).","longDefinition":"A financial market doesn't exchange goods or services like a consumer market -- it exchanges financial assets. It serves three functions: it channels savings toward productive investment, it provides liquidity (the ability to turn an investment back into cash), and it sets prices through the meeting of supply and demand. The stock exchange is one of the best-known financial markets, but others exist too: the fixed-income market (bonds), the currency market, and the commodities market, among others."}},{"concept":{"id":9,"slug":"currency","term":"Currency","shortDefinition":"A country's or economic region's money -- the dollar, the euro, the yen. Its value against other currencies depends on macroeconomic factors, not on any company's profits.","longDefinition":"\"Investing in currencies\" is, in practice, speculating on the exchange rate: buying a currency expecting it to appreciate against another. Unlike a share or a bond, a currency doesn't represent ownership or debt of any specific entity -- its value depends on monetary policy, inflation, and a country's or region's trade balance against others."}}],"calculatedBy":[]},"curricularPosition":[{"id":8,"moduleId":3,"slug":"currencies-and-commodities-as-assets","title":"What are currencies and commodities as assets?","summary":"You recognize currencies and commodities as asset classes with their own logic, distinct from stocks and bonds.","bodyMarkdown":"## Objectives\n\nBy the end of this lesson you recognize currencies and commodities as asset classes with their own logic, distinct from stocks and bonds.\n\n## Content\n\nSo far you've seen two asset classes that represent a relationship with a company: the share (ownership) and the bond (debt). Currencies and commodities are different: they don't represent a relationship with any specific company, but with a currency or a physical good.\n\nA currency is the money of a country or an economic region -- the dollar, the euro, the yen. \"Investing in currencies\" actually means speculating on the exchange rate between two currencies: buying one currency expecting it to appreciate against another. Its value doesn't depend on any company's profits, but on macroeconomic factors -- monetary policy, inflation, a country's trade balance against another -- explained in more detail in later levels of the curriculum.\n\nA commodity is a basic physical good, generally interchangeable between different producers: oil, gold, wheat, copper. Unlike a share, a commodity generates no profits and distributes nothing -- its return depends solely on whether its price rises or falls, determined by physical supply and demand for the good itself: how much is produced, how much is consumed, and expectations about both.\n\nBoth currencies and commodities trade on their own markets, with their own rules, separate from the stock and bond market -- but they're part, just like those, of the set of financial assets an investor can consider.\n\n## Example\n\nGold is a classic commodity: it pays no dividends or interest, but many investors buy it as a safe haven during periods of economic uncertainty, expecting its price to rise when other assets fall.\n\n## Common mistakes\n\n- Thinking a commodity generates income like a share (dividends) or a bond (coupons) -- its only source of return is the change in its own price.\n- Believing a currency's value depends on a company or a balance sheet -- it depends on a country's or region's macroeconomic factors, not on any specific entity.\n\n## Summary\n\nCurrencies and commodities are asset classes distinct from stocks and bonds: they don't represent ownership or debt of a company, but the value of a currency or a physical good. Their return depends on the change in their own price, determined by factors specific to each market.\n\n## Self-check\n\nWhy doesn't a commodity generate \"profits\" the same way a share does?\n\nWhat mainly determines a currency's value?","bodyHtml":"<h2>Objectives</h2>\n<p>By the end of this lesson you recognize currencies and commodities as asset classes with their own logic, distinct from stocks and bonds.</p>\n<h2>Content</h2>\n<p>So far you've seen two asset classes that represent a relationship with a company: the share (ownership) and the bond (debt). Currencies and commodities are different: they don't represent a relationship with any specific company, but with a currency or a physical good.</p>\n<p>A currency is the money of a country or an economic region -- the dollar, the euro, the yen. &quot;Investing in currencies&quot; actually means speculating on the exchange rate between two currencies: buying one currency expecting it to appreciate against another. Its value doesn't depend on any company's profits, but on macroeconomic factors -- monetary policy, inflation, a country's trade balance against another -- explained in more detail in later levels of the curriculum.</p>\n<p>A commodity is a basic physical good, generally interchangeable between different producers: oil, gold, wheat, copper. Unlike a share, a commodity generates no profits and distributes nothing -- its return depends solely on whether its price rises or falls, determined by physical supply and demand for the good itself: how much is produced, how much is consumed, and expectations about both.</p>\n<p>Both currencies and commodities trade on their own markets, with their own rules, separate from the stock and bond market -- but they're part, just like those, of the set of financial assets an investor can consider.</p>\n<h2>Example</h2>\n<p>Gold is a classic commodity: it pays no dividends or interest, but many investors buy it as a safe haven during periods of economic uncertainty, expecting its price to rise when other assets fall.</p>\n<h2>Common mistakes</h2>\n<ul><li>Thinking a commodity generates income like a share (dividends) or a bond (coupons) -- its only source of return is the change in its own price.</li><li>Believing a currency's value depends on a company or a balance sheet -- it depends on a country's or region's macroeconomic factors, not on any specific entity.</li></ul>\n<h2>Summary</h2>\n<p>Currencies and commodities are asset classes distinct from stocks and bonds: they don't represent ownership or debt of a company, but the value of a currency or a physical good. Their return depends on the change in their own price, determined by factors specific to each market.</p>\n<h2>Self-check</h2>\n<p>Why doesn't a commodity generate &quot;profits&quot; the same way a share does?</p>\n<p>What mainly determines a currency's value?</p>","sortOrder":3,"readingMinutes":5,"difficulty":"Básico","url":"/en/academy/fundamentals/financial-assets/currencies-and-commodities-as-assets"}],"graphSummary":{"root":{"type":"concept","id":"10","depthFromRoot":0,"entity":{"type":"concept","slug":"materia-prima","term":"Materia prima","excerpt":"Bien físico básico, generalmente intercambiable entre distintos productores -- petróleo, oro, trigo, cobre. Su rentabilidad depende exclusivamente de la variación de su propio precio."}},"depth":1,"returnedNodes":1,"truncated":false,"hasCycle":false,"nodes":[{"type":"concept","id":"10","depthFromRoot":0,"entity":{"type":"concept","slug":"materia-prima","term":"Materia prima","excerpt":"Bien físico básico, generalmente intercambiable entre distintos productores -- petróleo, oro, trigo, cobre. Su rentabilidad depende exclusivamente de la variación de su propio precio."}}],"edges":[]},"relatedNews":[],"relatedEntities":[]}