How to Invest in Nickel

The value of nickel, an industrial metal, rises when manufacturing is high.

The value of nickel, an industrial metal, rises when manufacturing is high.

Nickel is an industrial metal used in many common products, including stainless steel, batteries, magnets and coins. The value of nickel changes with market conditions such as available supply and industrial demand. Nickel is often most valuable when U.S. currency is weak, and investors sometimes use it as a "hedge" against low dollar values. There are several ways to invest in nickel, which usually requires an investment account with an online or traditional stock broker. Investors will also have to conduct research and evaluate current and future market conditions.

Discover what nickel-related investment options your broker offers. These options can include stock in companies that mine nickel, commodity futures, or special exchange-traded funds, or ETFs. Investment options vary by brokerage, and some strategies may require a new account with a different broker.

Evaluate the current market conditions, including the spot price of nickel, before choosing an investment strategy. Demand for nickel increases when manufacturing is high, generally because of its use in stainless steel products. Because nickel is internationally priced in U.S. dollars, worldwide sales increase when the dollar is cheap, which usually reduces supply and boosts the value of the metal.

Buy nickel-based ETFs to invest in nickel's value based on market indexes. These funds let ordinary investors target the nickel market through a unique portfolio of investments that most people could not afford to acquire individually. ETFs and exchange-traded notes trade like stock and have similar ticker symbols. These funds include investments like bonds, stocks, commodity futures contracts and -- sometimes -- physical stockpiles of nickel. The values of ETFs rise when the combined values of the fund's assets grow.

Research stock-exchange listed companies that mine nickel and other metals. When the spot price of nickel rises, companies that mine the metal generally see rising stock values. Most mining companies also explore for other resources, such as gold and copper. Companies with the strongest focus on nickel mining are the most likely to benefit from higher nickel prices.

Check with the administrator of your company-sponsored 401(k) plan for any mutual funds that cover nickel-related investments.. Some mutual funds that cover mining, metals or other industry sectors will include nickel-related investments.

Speculate on the future market price of nickel through investments called options or futures, which are purchased through the commodities markets. These sophisticated investments are considered expensive and risky, as they consist of a contract or option to lock in a certain price on of a commodity. Not all online investment services offer options and futures trading.

 

About the Author

Terry Lane has been a journalist and writer since 1997. He has both covered, and worked for, members of Congress and has helped legislators and executives publish op-eds in the “Wall Street Journal,” “National Journal” and “Politico." He earned a Bachelor of Science in journalism from the University of Florida.

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