Why is everyone talking about commodities? Because it's one of very few asset classes performing this year.
I recently attended a conference at the Fidelity campus in Dallas where he heard from analysts and others. I learned an interesting fact. The iPhone 13 uses eight to nine times more copper than phones using 5G, or 5th generation, technology. Worldwide, the use of cellphones has increased substantially over the last decade or so. Given these two pieces of information, it's easy to understand why copper has been a factor in the recent performance of the commodities sector.
I find this interesting, though. One of the most important things we do as financial advisors is to get clients to do the exact opposite of what they want to do - to buy low and sell high. For example, the commodities sector has been a very poor performer over the last decade. Now that they're having a good year, not only are investors interested in them, but I've heard a lot of people in the financial services industry recommend them as well. Yes, there could be plenty of room for more growth, but they were obviously a much better buy a year or two ago.
As always, a diversified portfolio is most important. Commodities are contrarian to many asset classes and can be used to diversify. I just don't know that now is the time to buy them if they've never yet been a part of a portfolio.