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Whats the long term return for commodity futures?
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Over a 45 year period, the return on commodities futures is comparable to that of stocks. Slightly lower or higher, depending on the time frame you choose.
The reason that it helps to reduce risk is that the movement of commodities futures is not strongly correlated with that of stocks.
If you can find different asset classes that offer comparable returns, but whose short-term volatilities are not strongly correlated, then you can reduce the overall risk in your portfolio without significantly harming overall return.
As DC pointed out, raw commodities are a losing proposition, but commodities futures are a completely different asset class, and that's the interesting one. Futures are the subject of the research paper cited in this article,
http://www.dailyreckoning.com/Featur...esFutures.html