Home News Inflation May Not Be Tamed. How Commodities Can Protect Your Portfolio.

Inflation May Not Be Tamed. How Commodities Can Protect Your Portfolio.

November 20, 2024

If prices start rising again, copper, corn, and oil could offer protection.

by Andrew Bary
Barron’s

It may be time to scoop up commodities, as higher inflation potentially looms under a Trump administration and the out-of-favor asset class underperforms stocks for a second year.

The Bloomberg Commodity Index, a leading gauge, is down 2% this year against the 25% gain in the S&P 500 index. That comes after a 13% drop in 2023, when the equity benchmark returned 26%.

Most retail investors have little or no direct exposure to commodities, even as so-called alternatives like private equity, real estate, and private credit prove increasingly popular with wealthy individuals. A Goldman Sachs survey of family offices—ultrahigh-net-worth families that manage their own money—found that they had just a 1% allocation to commodities, against 26% for private equity.

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