This article examines the pros and cons of investing in commodities-related investments. The question of whether or not to include it in a portfolio has no easy answers. Finding suitable and prudent investment vehicles can be even more daunting, but we have some insights.

Historically, investors viewed investment in commodities as a highly speculative venture advocated by salespeople using questionable—if not fraudulent—methods of promotion. Recently, however, not only individuals but also institutional investors have turned their attention towards commodities. The reasons for the increased interest include:
1. The recent disappointments in equity returns (primarily associated with the meltdown in technology sector stocks and the lackluster performance of the S&P 500 stock index);
2. The sharply rising price of many commodities (especially in the energy sector);
3. The availability of investment programs and products offered by vendors (mutual fund companies, brokerage houses, etc.) with a better reputation for respectability and honest dealing;
4. The emergence of commodity indexes that provide suitable benchmarks for investment manager evaluations; and,
5. The appearance of several academic studies suggesting that ownership of commodities can provide significant economic benefits.