February 2007

For over thirty years – roughly 1974-2004 – the S&P 500 trended upward, with the CRB (Commodity Research Bureau) trending down. The CRB is analogous to the Dow Jones Index – a mathematical combination of commodities prices that indicates their movement. It’s composed of weighted averages of prices of oil, coffee, gold, wheat, etc. Yet many savvy investors continue to trade in commodities, and many of those do very well. Why is that?