RetireJapan

Hi All
I am reading a book by Jim Rodgers on commodities, its a bit dated 2004
But some of his advice seems logical to me, commodities are safer than stocks; they will not go to zero like some company stocks can.
Also commodities are non correlated to the stock market, they are up significantly year to date while the stock market is floundering...
Also when Jim Rogers was looking to invest in commodities some years back he was not able to find a suitable index fund, so he started his own one: https://etfdb.com/index/rogers-internat ... al-return/
The expense ratio is a bit high at 0.75%, but I guess maybe for commodities that is expected?

Just wondering is anyone investing in commodity indexes ? What ones would you recommend for SBI, Interactive brokers?
Thanks

Maybe XME for mining, XLE for oil. Not sure about agriculture.

concerned wrote: ↑Sun May 01, 2022 9:07 pm Hi All
I am reading a book by Jim Rodgers on commodities, its a bit dated 2004
But some of his advice seems logical to me, commodities are safer than stocks; they will not go to zero like some company stocks can.
Also commodities are non correlated to the stock market, they are up significantly year to date while the stock market is floundering...
Also when Jim Rogers was looking to invest in commodities some years back he was not able to find a suitable index fund, so he started his own one: https://etfdb.com/index/rogers-internat ... al-return/
The expense ratio is a bit high at 0.75%, but I guess maybe for commodities that is expected?

Just wondering is anyone investing in commodity indexes ? What ones would you recommend for SBI, Interactive brokers?
Thanks

Here is a 20 year snapshot. S&P500 vs 4 Commodities trackers, including Rogers.

Food for Thought. Remember you were reading a salesman's book.

https://g.co/finance/RJI:NYSEARCA?windo ... RCA%3AVOO


...........................

That being said...

Thanks! Haystack, that is a great graph you posted, does put things in perspective

Past Performance is no guarantee of future results...

Also, click on the 5Y, 1Y and YTD Tabs to start the comparison at those points in time...

Tkydon wrote: ↑Mon May 02, 2022 6:41 am Past Performance is no guarantee of future results...

Also, click on the 5Y, 1Y and YTD Tabs to start the comparison at those points in time...

"Commodity spot prices, as an asset class, over the very long term, have not generated a significant real return."

Commodities should not be treated like equities or bonds. You should not expect long-term returns.

They are a tool for active investors who are looking for diversification at the cost of extra risk. Long-term investors should stay away, period.

https://www.bogleheads.org/wiki/Commodities

Your Graph.

Invesco DB Commodity Index Tracking Fund (90.39%) out-perfomed the Vanguard 500 Index Fund ETF (72.09%) over the last 5 years for a single Lump Sum Investment dated 5-May-2017!

And I will run a Fixed Investment Dollar Cost Average comparison for the two investments over the same period!

If you had invested US$100 every month since May 2017

VOO Loses by 25%
Total Units - 21.9056032539974
Total Value - $8,296

DBC Wins
Total Units - 379.584542525412
Total Value - $10,450


If you had invested US$100 every month since Oct 2010 when the DBC started

VOO Wins by 50%
Total Units - 82.6540269077477
Total Value - $31,301

DBC Loses
Total Units - 766.541579579214
Total Value - $21,103

bearing in mind that this period started right after the GFC when US equities were already in the toilet, and have run up in an unprecedented bull market bubble fueled by unprecedented Quantitative Easing, decreasing Interest Rates and P/E expansion in the S&P.

If you had invested US$100 every month since Mar 2014
It's a Draw

VOO
Total Units - 44.5289028989494
Total Value - $16,863

DBC
Total Units - 612.270744735395
Total Value - $16,856

Tkydon wrote: ↑Mon May 02, 2022 7:30 am Your Graph.

Invesco DB Commodity Index Tracking Fund (90.39%) out-perfomed the Vanguard 500 Index Fund ETF (72.09%) over the last 5 years for a single Lump Sum Investment dated 5-May-2017!

And I will run a Fixed Investment Dollar Cost Average comparison for the two investments over the same period!

If we could predict commodity super cycles, we all would be rich....

DBC - has a fee of 0.85%

Take another look at that long-term performance on a logarithmic scale.
Check our those drawdowns.
Would you really recommend someone hold this LONG TERM?

But your graphs are still for a single Lump Sum Investment at t=0...