Part emerging-markets story, part a play on sovereign-debt concerns, this sector "is in a bull market now, and it's not petering out," says Chris Ciovacco, principal of money-management firm Ciovacco Capital in Atlanta. "It could last another eight to 10 years."
Commodities include a range of basic products, from foods to metals. Among their attractions: Demand for such goods is hot in emerging countries. Also, "commodities are a way to hedge against inflation, because there is a scarcity element to them. You don't have a more stable store of value," says Mr. Ciovacco. Of course, the sector can swing wildly. To invest comfortably, Ciovacco suggests that "the average person" use a broadly diversified basket of commodities – such as exchange-traded funds or mutual funds. A mutual fund he likes is PIMCO CommodityRealReturn Strategy. If investors are new to commodities, they should test the waters with a portfolio weighting of 5 to 8 percent, he suggests.
