My reaction is irritation with what I will call "the financial advice community in general." I shouldn't criticize Ben Carlson, because I don't know what he's said about commodities in the past, but from perhaps 2006 to 2013-14 or so, there really was a broad consensus that your ordinary retirement investor "needed" commodities in his portfolio--a broad enough consensus that at one point Fidelity was using a 10% commodities allocation in their mainline target retirement funds.
I resisted the commodities fad, but I have to say that people were pushing it pretty hard as a sure thing, and my reaction to articles saying "funny thing, it stopped working at just about the time that people got into it" is "so, now
they tell us?" It's kind of like reading an article in 1932 that says "don't invest in stocks."
So, OK I guess, but I recommend William J. Bernstein's Skating Where the Puck Was,
which came out in 2012.
This is a chart of the PIMCO Commodity Real Return Strategy Fund, one that was widely praised and recommended in the past:
Now, one sort of murkiness is failure to distinguish between commodities themselves, which are the things you need to be prepared to take delivery of, and commodities futures, which is what all of the easily-accessed funds and ETFs invest in. I think. I don't do it myself so I don't understand it too well. You will notice that Carlson says exactly nothing
about this, and I'm not knowledgeable enough to know which of them he's talking about, or which the Goldman Sachs Commodities Index and the Bloomberg Commodities Index are indexing. Quick Google search: "The Bloomberg index is made up of 22 exchange-traded futures on physical commodities." Well, if we are talking about futures
, then it might be a little facile to say "They provide no dividends or income. They don’t have earnings." That's a fair statement about commodities themselves, but commodities futures have "roll return" and they have interest on collateral. I think I remember someone saying something like that, anyway. So, it's not that they "don't have earnings," it's that they (probably) do but the risk-return relation isn't as good as for boring old traditional securities.
Anyway, the commodities thing seems to have been a fad which has come and gone, which didn't do investors much good--didn't do them much
harm either, but mostly did good for the purveyors of commodity funds and ETFs.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.