This Table Demonstrates With colours Why You Should Diversify Your Commodities Portfolio

The takeaway from US Global Investors’ just-updated Periodic Table Of Commodities Returns is that there is no single best commodity to invest in.

Indeed, annual returns can be extremely volatile.

Take coal:  In 2007, it had returns of +97 per cent.  The next two years saw pretty bearish results, while the two years after that proved bullish.

And last year? Coal was the worst-performing commodity of all the ones the firm tracks, at -16 per cent.

From US Funds’ Frank Holmes.

This table shows the ebb and flow of commodity prices over the past decade and illustrates the principle of mean reversion—the concept that returns eventually move back towards their mean or average. The price movement of commodities is historically both seasonal and cyclical. That’s why when investing in natural resources, we believe your portfolio should hold a diversified basket of commodities actively managed by professionals who understand these specialised assets and the global trends impacting them.

Here’s the full table:

us funds commodities returns table

Photo: USFunds

SEE MORE: Aswath Damodaran’s Five Cautionary Notes For Value Investors >

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