Please explain the following two points on page 8 of chapter 7: 1) Returns accrue to long only investors without the need for active management. 2) Commodities offer a package of diversification benefits unlike any other asset.
commodities Hi, I think this bit of core reading might be a little out of date, as it treats commodities as an unwanted investment. It used to be that commodities were not sought as an investment. therefore the futures attracted mor sellers than buyers, and the prices sank until investment buyrs were attracted. This meant that it was possible to buy the future at its (low) price and get a good return even without active managment. The mention of diversification refers to the fact that commodities do not correlate with other typical asset categories (which has been demonstrated to be correct)
