A case for commodities

commodities

Investors dogged by relatively poor returns from bonds and equities over the past few years should seriously consider direct exposure to commodities

The case for investing in commodities is a strong one. The factors which have driven commodity prices inexorably downwards over the past 25 years are mitigated by new circumstances. The slowdown in the world economy - growth rates in the US and China are now less than half what they were at their peak - will moderate the rise in commodity prices. But even if world economic growth stalls for the next two years, as seems likely, there will be sufficient demand and sufficiently inelastic supply to maintain further rises in commodity prices. For investors, returns on commodities have histori...