Category: Commodities, Investing, Think Tank

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3 Responses to “On the Correlation Between Commodity and Equity Returns: Implications for Portfolio Allocation”

  1. Frilton Miedman says:

    In conclusion, He notes commodity/equity correlation increased substantially after ’08, I wager that’s the result of the extreme nature of the decline, everything was crushed, then everything rebounded more uniformly than usual in the process of mean eversion.

    It’s worth noting that since the end of 2011 major sectors have been diverging more pronounced than the two years prior.

    Just an observation.

  2. CSF says:

    I don’t see how I can fit commodities into my asset allocation strategy. Contango eats principle. The ETFs/ETNs carry high fees, and ETNs in particular depend on the creditworthiness of the issuer. The exception is precious metals, since I can store my own or invest in ETFs that warehouse the stuff and charge a reasonable fee. I view the other commodities as trading vehicles, and I know just enough to stay away. My only exposure comes from investing in the producers via diversified equity ETFs.