Stocks vs Commodities

Hello community,

Found this graph that I think is very interesting to put our VT (and stock) investments into perspective:

Some more interesting insights here: Weekly S&P500 ChartStorm - 24 April 2022 - by Callum Thomas

Is this time to allocate some % of the portfolio into commodities?

What’s the overall performance of commodities vs stocks? I would say stocks outperform commodities. I’m not interested in short-/mid-term windows where a certain asset outperforms the other because anyway we won’t be able to predict those windows so it would be a pure guess. From a diversification perspective commodities are also not needed because a well diversified stock portfolio or an ETF is enough diversification and more than that will just cost you money rather than yielding any further profits or security. There are also no dividends for commodities and they just lie there and do nothing, so I definitely prefer stocks, basically from every perspective you look at it.

Tl;DR: IMHO No, I don’t think so.

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The chart is onteresting but not actionable - there is simply no way how you could invest into commodities. You might buy commodity futures / etf thereof but the future rolling causes material drag. If there was a way to invest into commodities; i might just allocate 5-10% into it and constantly re-balance.

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Historic performance doesn’t guarantee future returns yada yada… if you believe a big downturn is coming, just buy Gold :slight_smile:

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I am sceptical of this chart. Does it show total returns, including dividend yields reinvested etc.? Also, I believe this chart doesn’t take into account the most powerful benefit of passive buy&hold investing: compounding (there’s no such effect with commodities). Finally, commodity-rich countries and commodity-producing companies are included in a globally diversified equity portfolio, so you’ll automatically participate in any commodity-boom (to the right, market-weighted, extent).

Investing in commodities, imho, might be a good short-term tactical move if you have deep insider knowledge of the commodity market. If not, you’ll always be too late investing.

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