Trying to order from basic (easy read) to intermediate (I need pen and paper) to advanced (I'm scratching my head).
Low numbers are easy reads, high numbers advanced.
Suggestions welcome and bear with me if I make mistakes.
1. Title: Are Commodities Futures Too Risky for Your Portfolio? Hogwash!
Summary/Quote: Using the most comprehensive data on commodities futures returns ever assembled, Wharton finance professor Gary Gorton and K. Geert Rouwenhorst, finance professor at the Yale School of Management, have reached a surprising conclusion: Commodities offer the same returns as investors are accustomed to receiving with stocks, which are typically viewed as safe enough for ordinary investors.
2. Title: Facts and Fantasies about Commodity Futures
by: Gary Gorton and K. Geert Rouwenhorst
Summary/Quote:Fully-collateralized commodity futures have historically offered the same return and Sharpe ratio as equities. While the risk premium on commodity futures is essentially the same as equities, commodity futures returns are negatively correlated with equity returns and bond returns. The negative correlation between commodity futures and the other asset classes is due, in significant part, to different behavior over the business cycle. In addition, commodity futures are positively correlated with inflation, unexpected inflation, and changes in expected inflation.
3. Title: On Stuff
by: William J. Bernstein
Summary/Quote: Over the past few years, I?ve done my best to avoid writing about commodities futures. I really have. They?ve gotten to be such a hot topic, however, that I?ve thrown in the towel. Better to write a piece I can link to, rather than type the same reply once a week, year after year.
4. Title: Not All Commodity Indexes Are Created Equal (Part One of a Two Part Series)
by: Richard Feldman, CFP, MBA, AIF
Summary/Quote: Direct investment in commodities has become far easier with the advent of a series of funds based on popular commodity indexes but performance can be drastically different due to the composition and methodology of index construction. (find out more about the practical aspects of investing in commodities).
5. Title: Contango, backwardation, and all that good stuff
by: Prof. James Hamilton
Summary/Quote: ...some readers might appreciate a technical background discussion of the way in which carrying costs and convenience yield influence the relation between spot prices and futures prices. So if that describes you, by all means read on.
6. Title: CRB Indexes
Summary/Quote: For nearly 50 years, this world-renowned index has served as the most widely recognized measure of global commodities markets. As a benchmark, the Reuters/Jefferies-CRB Index is designed to provide timely and accurate representation of a long-only, broadly diversified investment in commodities through a transparent and disciplined calculation methodology. (this is the CRB index home page with a lot of information)
7. Title: Going Long on Commodities: Six ways to invest in commodities
by: Will Acworth
Summary/Quote: ...pension funds and other institutional investors are looking for ways to add commodity exposure to their portfolios. One simple way to do this is by investing in a commodity index. This approach is especially attractive to institutional investors who are familiar with index investing in the equities world and like the idea of "buying the market" in a single transaction.
8. Title: A Rediscovered Asset Class: Commodity Futures
Summary/Quote: I have long been interested in using commodity futures as an asset class but until recently there has been no simple way to implement a low cost diversified commodity futures investment into my portfolio. (...) the commodities investment landscape has changed for the better over the last five years or so.
9. Title: Commodities As An Asset Class
by: Frank Armstrong, CFP, AIF
Summary/Quote: At first blush, commodities sounds like a risky strategy that only a wild and crazy guy would consider. In fact it's just the opposite. Properly utilized, it's a way to reduce risk in a portfolio consisting of stocks and bonds.
10. Title: Commodities: Boom or Bust?
by: Jeremy Siegel, Ph.D
Summary/Quote: Many money managers are recommending that investors put a portion of their money in commodities to hedge against inflation and diversify their portfolio. Is the recent run-up a bubble? Or are commodity prices going even higher? And what does this mean for your investments?
11. Title: Robert Greer Discusses the Benefits of Commodity Investing
by: Robert J. Greer
Summary/Quote: We asked Robert Greer, PIMCO?s Real Return Product Manager, about the benefits of commodity investing and PIMCO?s approach to this distinct asset class...
12. Title: Commodity myths
by: David Baker, Executive director, UBS Wealth Management
Summary/Quote: Thanks to recent exceptionally high returns, investor focus has once again returned to commodities. Not bad, considering that five years ago the trend was for investments in anything light, virtual and fast. People thought that commodities were heavy and clumsy beings from a prehistoric age. Now the tables have turned and the call is for investments that are solid, down-to-earth and concrete. But is this new craze also subject to a tad too much euphoria?
13. Title: What the Price of Gold Is Telling Us
by: Congressman Ron Paul
Summary/Quote: The financial press, and even the network news shows, have begun reporting the price of gold regularly. For twenty years, between 1980 and 2000, the price of gold was rarely mentioned. (...) Since 2001 however, interest in gold has soared along with its price. With the price now over $600 an ounce, a lot more people are becoming interested in gold as an investment and an economic indicator. Much can be learned by understanding what the rising dollar price of gold means.
14. Title: Commodities: A Case for Active Management.
by: Akey, Rian P.
Summary/Quote: As we document a variety of the limitations inherent in passive commodities investments via these indexes, we hypothesize that the commodities asset class has a number of distinct characteristics which may make it particularly suitable for skillful active managers to find alpha opportunities;
15. Title: Benefits of Commodity Investment
by: Georgi Georgiev Phd Candidate
Summary/Quote:(...) This research places the use of commodity-linked or investible commodity indices as a central part of the investors? asset allocation decision.
16. Title: The Benefits of Commodity Investment:2006 Update
by: CISDM Research Department
Summary/Quote:Results show that direct commodity investment can provide significant portfolio diversification benefits to traditional stock and bond portfolios and can provide return opportunities beyond those achievable from commodity-based stock and bond investment.
17. Title: Wilshire Research Commodity Index Comparison
by: Thomas E. Toth, Associate
Summary/Quote:(...) Primarily, the greatest differentiating factors are the number of components used to create the index and the method of weighting each component. This summary will include three indices: the Goldman Sachs Commodity Index (GSCI), which is the oldest of the three, the Dow-Jones AIG Commodity Index (DJ-AIG) and the more recently introduced Deutsche Bank Mean Reversion (DBLCI-MR).
18. Title: The Tactical and Strategic Value of Commodity Futures
by: Claude B. Erb and Campbell R. Harvey
Summary/Quote:Historically, commodity futures have had excess returns similar to those of equities. But what should we expect in the future?
19. Title: Should passive commodities "investments" play a role in your portfolio?
by: Edwin Denson, PhD
Summary/Quote:(...)Simply stated, we do not recommend passive allocations to commodities. The history of investing in physical commodities is less than compelling. There are fundamental reasons that this should be true and will likely be true in the future. The history of investing in fully collateralized commodity futures, which is what most commodity proponents recommend, is puzzling and creates more questions than answers.
20. Title: The Nature of Commodity Index Returns
by: ROBERT J. GREER
Summary/Quote:(...)An asset class must satisfy two main criteria before an investor should consider adding it to a portfolio. First, the asset should increase the expected utility of a portfolio. (...)The other criterion for an asset class is that the returns cannot be replicated with combinations of other assets.This article explores those fundamental reasons as well as other factors that form the basis of commodity investing.
21. Title: Conditional Means, Volatilities, and Correlations in Commodity Futures Markets
by: James Chong and Jo묬e Miffre
Summary/Quote:(...)This paper concludes that the conditional means of commodity futures is more often than not negative, suggesting that a short position is optimal. The conditional correlations are also found to rise in periods of recession. This is welcome news to long commodity traders as it is in periods of recession that they need the benefits of diversification the most.
22. Title: Real Return Fund: The Case for a Real Asset Class
by: Christopher A. Moth and John Kirk
Summary/Quote: (...)After considering what kind of real returns have been achieved in the past and may be in prospect, how real assets behave in relation to conventional securities, we will examine the effect of combining conventional assets with real ones.
23. Commodity Futures: A Japanese Perspective by Gorton, Gary B., Hayashi, Fumio and Rouwenhorst, K. Geert, (October 19, 2005). Yale ICF Working Paper No. 05-27
We study the basic properties of an equally-weighted index of U.S. commodity futures from the perspective of a Japanese investor. We find that the returns on the U.S. equally-weighted commodity futures index maintain their basic properties, documented in Gorton and Rouwenhorst (2005), when translated into Yen. In particular, looking at returns on Japanese stocks and bonds, the commodity futures index, translated into Yen, continues to display equity-like returns, but with slightly less volatility. In addition, the Yen-based commodity futures returns show essentially zero correlation with Japanese equities and negative correlation with bonds.
contributed by Barry