Why Investors May Want To Think About Adding Commodities To Their Portfolios

Recent reports such as the Consumer Price Index (CPI) and wages have shown inflation coming under control but these data points come with a lag and measure end point prices. If you look at the source or input prices you’ll see things are not so subdued. Using raw commodity prices as a gauge it looks […] July 24, 2023 [Option Sensei] [Why Investors May Want To Think About Adding Commodities To Their Portfolios]( Recent reports such as the Consumer Price Index (CPI) and wages have shown inflation coming under control but these data points come with a lag and measure end point prices. If you look at the source or input prices you’ll see things are not so subdued. Using raw commodity prices as a gauge it looks like inflation embers are still glowing and have the potential to flare higher in coming months. Indeed one of the factors causing a [spike in some commodity prices]( especially within the agricultural sector, is the global heatwave. It is stressing crops in terms of both yield and the ability to harvest and transport. According to recent agricultural reports from the USDA 57% of the domestic corn crop and 51% of soybeans are dealing with drought conditions. These conditions are expected to worsen as El Niño develops, a climate pattern that can bring drier and hotter weather to the Midwest. Other issues facing agricultural commodities include the ongoing war in Ukraine in which Russia recently stated it will stop exporting wheat which caused the price of wheat futures to spike some 10% in a single day hitting a “limit up” trading halt. So while everyone has become re-enamored with stocks, especially the [big cap tech names]( don’t overlook the importance of diversifying portfolio with some exposure to commodities. But what may be bad news for your grocery bill could be good news for your portfolio. Historically commodities have low correlations to equities and the recent relative underperformance suggests this could be a good time to consider adding agriculture to a diversified strategy. Let’s go to [Magnifi]( to research ETFs, which [provide exposure to commodities](. The Invesco DB Agriculture Fund ([DBA]( is a great way for investors the to invest in a basket of commodity futures without having to open a commodity account or manage their own positions.The fund holds the major agricultural commodities, including corn, soybeans, wheat, sugar, cocoa, coffee, cotton, live cattle along with a nice weighting of US Treasury securities for interest income. Those top six commodities comprise 60% with 40% concentrated in the grains sector. The fund rebalanced annually in November with an expense fee is 0.85%. Soft commodities were the best-performing sector of the commodities market in Q1 2023, with cocoa and sugar reaching 10-year highs. This propelled DBA shares from a low of… Continue reading at [WEALTHPOP.com]( SPONSOR [These 110 Banks Are Planning to Replace the U.S. Dollar]( Please pay close attention because if your bank is on this "blacklist" with 110 banks, your entire life savings could be at risk. According to this famous banker, you must move your cash before July 26... Or risk losing everything. Learn how to prepare for what The Wall Street Journal called a "game-changing development." [Prepare Now]( NOTE: If URLs do not appear as live links in your e-mail program, please cut and paste the full URL into the location or address field of your browser. [Privacy Policy]( | [Terms & Conditions]( This is a paid advertisement.This is not a solicitation for the purchase or sale of securities. Readers are encouraged to conduct their own research and due diligence, and/or obtain professional advice, prior to making any investment decision. Advertisements and sponsorships are provided as a service to Wealthpop users . Wealthpop is not responsible for their content, services or products. The statements and opinions contained in this advertisement are not those of Wealthpop, and Wealthpop disclaims any liability for or arising from such statements and opinions. You are hereby advised that Wealthpop is receiving a fee as compensation for the distribution of this advertisement. [Click here to unsubscribe]( Copyright © 2023 Wealthpop. All rights reserved. Magnifi Communities, 1 Penn Plaza, Suite 3910, New York, NY 10019