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Commodities Briefing - Categorized | Financial, Investment more

Do commodities belong in your allocation?

Posted on 08 April 2014

The market price of a basket of commodities should increase roughly in line with inflation, but why would there be returns beyond this? While the spot prices of commodities tend to track inflation, futures contracts of commodities have historically delivered positive returns.
John Maynard Keynes laid the foundation of modern thinking on commodity futures markets . He proposed that investors in commodity futures are providing risk capacity to the producers of commodities by allowing them to lock in a fixed price for commodities to be delivered at a future date. In other words, investors in future contracts are essentially insuring commodity producers against a decline in prices in the future………………………………………..Full Article: Source


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VRS - who has written 40705 posts on Opalesque Commodities Briefing.


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