Commodities may have a place in a portfolio for the reason that they often go up when stocks go down and go down when stock go up. That makes for diversification and helping to smooth out returns but, remember, trying to time it is not possible on a consistent basis. This chart from wealthdaily.com has only specific time periods and I would prefer to look at other time periods, too. No more than 5%-10% of your portfolio should be here, if used, but for most investors (less than $5 million in assets to invest) it probably is unnecessary.
100 YEARS OF INVESTMENT GENERATIONS
Generation / Commodities / Stocks / Years
1914 – 1930 . . . . - 14% . . . 159% . . . 16
1930 – 1947 . . . . 244% . . . - 30% . . . 17
1947 - 1965 . . . . - 18% . . . 503% . . . 18
1965 - 1981 . . . . 123% . . . 35%** . . . 16
1981 - 1999 . . . . - 9% . . . 1054% . . . 18
1999 - 2016 . . . . ???? . . . ???? . . . . . . 17
** While stocks had a small positive return for 1965-1981, if you adjusted for inflation the number would be negative
Table: WealthDaily.com Data Source: CRB Index / S&P 500 Index
An Introduction
Hi. Welcome to BourGroup and my blog. Phil
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.
Phil Bour is a CERTIFIED FINANCIAL PLANNER(tm) professional since 2004, a Magna Cum Laude college graduate and an accounting professional for over 35+ years. I love numbers, statistics and economic history.
I am also an Enrolled Agent (EA) to represent taxpayers before the Internal Revenue Service and to prepare tax returns.
"Phil"osophy: I believe that you can manage your money on your own (not necessarily through individual stock selection but through mutual funds, ETF's and other solutions) once you receive some one-time, professional guidance. Why pay annual fees when there may be little added value? For additional information, first read the "An Introduction" label at the left. Then move on to others.