Commodities are always a popular thing to trade, however one particular commodity seems to be catching the eye of many investors.

Water – the stuff we often take for granted – has so far been ignored by many investors however interest in this precious commodity is on the increase. So why has it been ignored so far? The first reason is that it isn’t often traded by itself. Many investors also look to the more traditional trades such as oil as these have the potential for big gains whereas water tends to be seen as quite a defensive strategy.

But water really may be a good buy.

Despite living on a planet which is about 70% covered in the stuff, only around 3% of the global water supply is actually deemed drinkable. As the Earth’s population increases, the demand for clean, drinking water is only ever going to go up. The major problem with this is getting the water to a drinkable standard – currently, it is problematic to desalinate water and this means that water is one of the most important resources of today.

It’s not just water that you have to buy either – look for stocks that support water for example water infrastructure or water treatment stocks. And if you aren’t keen on investing directly, there are plenty of funds that have a significant water skew to them. Although this year’s returns don’t look particularly impressive, this is a stock that could do very well in the medium to long term.

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