Benefits and Risks of Physical Commodities Investment

The role of physical commodities in an investment portfolio has gained significant attention in recent years, especially amid changing market conditions and increasing inflationary pressures. Investors often consider physical commodities such as gold, silver, oil, and agricultural products to diversify their portfolios and hedge against economic uncertainty.

Discuss the benefits and risks associated with investing in physical commodities. In your essay, outline how physical commodities can act as a hedge against inflation, their impact on portfolio diversification, and the specific risks that investors must consider when adding these assets to their investment strategy.