Investing in Commodities: Popular Beliefs and Misconceptions
George S. Skiadopoulos
University of Piraeus; University of Warwick - Warwick Business School - Financial Options Research Centre; City University - Faculty of Finance - Cass Business School
March 10, 2012
Journal of Asset Management, Vol. 13, No. 2, pp. 77-83, 2012
Over the last decade institutional and individual investors have increased their allocated share of wealth to commodities immensely. In this short article, we discuss some common beliefs and point out the misconceptions on the motivation for investing in commodities, whether commodities should be included in investors’ portfolios and how investors should measure the performance of commodity funds. The expressed ideas can enhance investors’ interest in this fascinating asset class.
Keywords: Asset allocation, Hedging pressure, Commodity futures, Commodity Index, Performance evaluation
JEL Classification: C31, E44, G12, G13, G21Accepted Paper Series
Date posted: March 12, 2012
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