You may wonder why we've summoned up that old Baron Rothschild quote now - after all, several equity markets have seen jaw-dropping gains in October and the market pressures in August and September are increasingly looking to be a distant and unpleasant memory.
It is because some of the market's greatest diversifiers and effective inflation hedges have been bloodied. And it may be time to rediscover the beneficial, long-term impacts that they can have on a portfolio.
Adding commodity-tilted exposure at this stage may sound like a risky proposition, but over the long run, the opposite has been more accurate. As a general asset category, it offers several portfolio benefits worth remembering - its low correlation to financial assets, its inherent inflation-fighting properties and its protective capabilities against global event risk.
We are not making a 'call' on commodities (though we are bullish on their long-term prospects). Rather, we believe that commodities should form a permanent, strategic portfolio allocation. And while tactical considerations are important (timing, weighting, etc.) that role is best played by managers possessing specific investment expertise.
To learn more about the role that commodity exposure can play in successful portfolios, we invite you to read our recent research piece entitled "Are commodities still a valid inflation hedge in this low price environment?" by clicking on the image below.