Monday, April 20, 2015

Return to Commodities

When the price of oil was dropping like a stone last year, it caused an exodus from commodity investments generally. Investors pulled a net $20 billion out of commodity investments like oil and precious metals last year. That continued a trend from 2013, when commodity investments dropped by a net of $47 billion.

But things are turning around this year. In the fist quarter of 2015, investors have poured $6.6 billion into commodities. That could just be the result of bargain-hunting, though, since so many commodity prices have fallen in recent years.

On the other hand, it could be a signal that we are returning to a more normal environment, where commodities are a regular part of many portfolios. Investors pumped a net of $23 billion into commodities in 2012, and $14 billion in 2011.

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