Buying a commodity ETF might not sound exciting, but it could be a smart move for your portfolio. While investors try to diversify, they often split their nest eggs between stocks and bonds, and overlook commodities. Luckily, a commodity ETF is an easy way to fix that.
That’s not to say you should dump everything into, say, a big gold investment. But it does mean you might be better off if you use a little piece of the pie to invest in gold. Or maybe you should consider investing in silver. Really, a host of commodities have plenty of portfolio appeal.
For one, commodities have demonstrated a low correlation to other assets historically (although not always). Plus, a particular commodity ETF may make a sensible play as part of a broader thesis.
There’s no universal amount you should dump into a commodity ETF, as your risk appetite and take on the current climate for each commodity will determine that. But if you’re wondering which basic commodity ETF to consider, here’s where you should start looking.
Namely, five funds: a gold ETF, a silver ETF, a copper ETF, a platinum ETF and a catch-all commodity ETF.