Matt Kranz for USA Today says that commodity ETFs are fine for investing, so long as investors understand their risks. During inflation, prices rise rapidly, and investors, savers and bondholders all suffer. Commodity-related investments and ETFs are perfect buffers for inflationary periods.
Just beware, however, as commodities prices already reflect current inflation expectations, so you could lose money if inflation is lower than people fear.
Watch the trend lines to protect yourself.
- iShares S&P GSCI Commodity Index Fund (NYSEArca: GSG): up 5.3% year-to-date
- PowerShares DB Commodity Index (NYSEArca: DBC): up 3% year-to-date
- Greenhaven Continuous Commodity Index (NYSEArca: GCC): up 6.5% year-to-date
For more stories about commodities, visit our commodity category.