How to Invest in Shipping Stocks

The shipping industry is a crucial and permanent part of the
global economy. In fact, it is said that the shipping industry alone is
responsible for the transport and carriage of 90% of the products involved in
world trade. In the USA alone, the shipping industry is valued to be at $700
billion and is predicted to reach the trillion dollar mark by 2020. Because of
this, a lot of investors are looking into the odds of making it big by
investing in shipping stocks.

Why invest in shipping?

Have you tried shipping out a package before? Check out the Shipping Rates. Each day,
thousands of people send out packages whether it be for personal reasons or
business. And although USPS Shipping Rates are affordable and cheap, the number
of people using the service assures that there will always be money circulating
in the shipping industry. If the global economy continues to show signs of
recovery, freight volumes are expected to stabilize over the years. With this,
consolidation in the industry will also help decrease price competition and
this will help the profitability of the shipping industries. A lot of value
investors have found opportunities in shipping stocks as the fundamentals of
the industry continuously improve. Some shipping stocks can deliver higher than
average market dividend yields.

Factors affecting the shipping industry:

Supply

This refers to the number of vessels that are on the market
and the total is affected by new builds and vessels that retire.

Demand

This is the demand for the shipping service by the
consumers, and the demand is affected by the overall global economy and its
growth.

Cost

This refers not to the shipping rates alone but the overall
cost of operating a shipping vessel which can be affected by the cost of bunker
fuel and interest rates for shipping companies that are still paying off debt.

How to invest in shipping

1. Exchange-traded funds or ETFs

If you are looking for an easy way to invest in the shipping
industry, ETFs are your best option since they can give you different exposures
in one form of security.

2. Individual Stocks

American depositary receipts or ADRs and common stock are
another way for you to invest in the global shipping industry. Here, you get to
select individual stocks.

The shipping industry might be a sector that has struggled
over the past years due to a past economic crisis. However, now that the global
economy is showing so much improvement and the shipping industry is the
lifeline of the global economy, investing in shipping stocks is now turning out
to be a profitable trading move. So if you are looking for new stocks to invest
in, taking a look at shipping stocks will be worth your time and money.