Commodity prices have not had the best time of it as of late. According to some indices, prices are down some 10% for the month-to-date. We can’t help wondering whether this at all related to the fact that just about everybody is jumping onto the commodity bandwagon.
A major Wall Street player, Credit Suisse, believes investors should embraces commodities as a truly “alternative asset.” From the Credit Suisse press release:
Credit Suisse believes that commodities answer the fundamental need of institutional investors for long term strategic diversification. They demonstrate exceptionally low correlations with financial assets in markets around the world and can help diversify the institutional portfolio more effectively than conventional asset classes and many so called “alternative” assets over the intermediate and long term.
The release goes on extolling the many benefits of commodity investment and the fact that CS has a product to fit the needs of investors seeking exposure to the asset class.
For a more nuanced take on the value of a strategic investment in commodities one can take a look at this paper.