Business Insider India has updated its Privacy and Cookie policy. We use cookies to ensure that we give you the better experience on our website. If you continue without changing your settings, we\'ll assume that you are happy to receive all cookies on the Business Insider India website. However, you can change your cookie setting at any time by clicking on our Cookie Policy at any time. You can also see our Privacy Policy.
This Beautiful Quilt Of Commodity Price Returns Reminds Us We Should Diversify Our Portfolios
This Beautiful Quilt Of Commodity Price Returns Reminds Us We Should Diversify Our Portfolios
Rob WileFeb 4, 2014, 00:06 IST
2013 was a really terrible year for commodities, as flagging demand worldwide ate into prices.Just four major commodities - natural gas, oil, palladium and, barely, zinc saw year-over-year price gains, according to the "commodities quilt" below from U.S. Funds. Growth in the top performer, natgas, which climbed 33%, diverged 66% from the worst performer, corn, which fell 23%. That may seem extreme, but it's been worse: in 2006, the disparity was almost 200 percent between winning nickel and losing natural gas. It's also importants to recognize that annual returns for each commodity can be quite volatile. That's why the pattern of colors in the quilt is so chaotic."The price movement of commodities is historically both seasonal and cyclical," wrote the folks at U.S. Funds. "That's why when investing in natural resources, we believe it is important for your portfolio to hold a diversified basket of commodities and to be actively managed by professionals who understand these specialized assets and the global trends impacting them."U.S. Global InvestorsThis chart also captures just how volatile commodities are. Here's a skitched-up version showing how natgas and corn have done over the past few years:U.S. Global Investors
