economicz

Reggie Wrote:
-------------------------------------------------------
> The text said there is a debate as to whether or
> not commodities should be considered an asset
> class because their price tends to fall over time,
> not rise. Then it goes on to say investing in
> commodities is good for your porfolio because they
> have a similar risk-return profile as equities,
> then shows a graph of them rising over 100 years.
> WHAT THE FRICK IS GOING ON HERE!?

The graph is probably assuming that the commodity index is constantly being rebalanced. Rebalancing a commodity portfolio is essential to sustaining long-term gains.