Stock investing

Stock investing

Why invest in cocoa & chocolate? Fluctuating prices offer opportunities in the market right now, is investing difficult?

The cocoa market is characterized by its fluctuating prices. Important reasons for this are the vulnerability of the cocoa tree and the political and economic conditions of the countries in which cocoa is produced. A cocoa tree is demanding and needs a lot of sunshine. Temperature, precipitation and soil fertility must be optimal. A cockroach plague or drought can be disastrous. Harvests are very variable, which of course causes the price to fluctuate.

  • 70% of the total cocoa production takes place in (West)-Africa. The political climate in these countries can influence the cocoa price considerably. The civil war in Côte d’Ivoire, for example, caused the cocoa price to rise sharply in 2011. It is also not exceptional for cocoa farmers to build up huge stocks of cocoa in anticipation of rising prices in order to sell it. Factors like these make the cocoa market less predictable.
  • The considerable fluctuations in price make investing in cocoa risky, but also attractive. Correct timing is everything. So keep a close eye on local news and weather forecasts. If you step in at a time when prices are falling, it’s waiting for a bad harvest to emerge and you can cash in. One is a loss, the other is a profit.

Cocoa is getting more and more popular

Cocoa is a raw material for which, just like coffee and sugar, there is a long-term demand. It is a luxury product and unprecedentedly popular in Western countries. The average European eats almost 5 kilos of chocolate a year to give just one example. Asia and Africa are following this development. The demand for cocoa from these continents will increase enormously in the future while production is expected to remain the same or decrease. Scarcity may ultimately be the result, which will cause prices to rise. Source: Corredor de bolsa en Mexico at C-TradeAlert.MX

Investing responsibly

Many African countries are struggling with socio-economic and climatic problems. Think of high unemployment, corruption and extreme weather conditions. The demand for cocoa continues to rise, as does the pressure on the climate. Sustainable investment is becoming more important every year and, let’s be honest, pure necessity. When you invest in companies that produce their cocoa in a sustainable way with good working conditions, this is not only fun for your own wallet, but you also contribute to society in a positive way.

Stock investing

Do you have savings in your account and you don’t really see this growing because of the current savings interest rate? An increasingly popular alternative is investing.

Before you start, it is good to learn a little more about it. So are you looking for information about investing for beginners? In this article and the accompanying video we tell you about the basics of investing. One of the most important factors is the research part, there are quite some options and websites were you can check all the different possibilities in countries like The Netherlands. The website has some interesting websites about stocks like Spaarbuidel. 

What is investing?

Let’s start with the question: what is investing? Simply put, it is a form of investing. With investing you put your money to work with the aim of making it grow. This can be done, for example, by buying shares that you think will soon be worth more, so that you can sell them later at a profit.

How does investing work?

When you invest, you make an investment in the hope that it brings in money. The most popular way to invest is through the stock market. Previously you had to physically go to the stock exchange to trade, now you simply do so online.

  • When you start investing, you can choose to actively invest yourself. You then decide which shares you buy and when you sell them again. But you can also choose to leave the investing to an expert. This can be interesting when you have little experience in investing, or do not have the time to follow the stock market yourself. Read more about the difference between investing your own shares and having them invested.

What can you invest in?

This can be done in many different ways. Of course, cryptocurrency is in the news these days, and investing via crowdfunding is also becoming increasingly popular. Within the investment world there are several categories in which you can invest. Below we will explain the most important ones for you.

Investing in shares

This is what most people think about when it comes to investing: investing in stocks. But what exactly are equities? Equities appeal to many people’s imagination: you buy a ‘piece’ of a company and are then co-owner. This means that you share in the profits of the company, which can be distributed to you as a dividend. The share price can also rise, making a profit on your investment like a lot of people in The Netherlands did on Tesla.

Investing in bonds

A lot less known but very interesting is investing in bonds. A bond is a type of loan. Both governments and companies can borrow money from investors via bonds. You receive interest for this. In investment language, this interest is called the coupon.

  • Because, in principle, at the end of the term, unless the company has gone bankrupt, you recover the value of the bond, investing in bonds is less risky than investing in shares. But this also means that, in general, the return when investing in bonds is somewhat lower.
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