Going For The Gold: Inflation And Commodities

As the mass of investor's attention seems to be focused on deflation, in a piece titled “Commodities and Inflation,” Denis Chaves of Research Affiliates, argues that a full spectrum of potential economic outcomes should be considered, including the potential of inflation. The research note focuses on the use of commodities in a portfolio as a method to hedge against inflation.

Business prices are co-related to the price of commodities

While many stock investors think they are hedging their portfolio against inflation with stocks, the report notes that inflation is non-correlated to stocks. The theory is that a business raises its prices when their prices of commodities rise,...