Commodities have substance in a bimodal world

The long-term case for commodity investment will be affected by dichotomous anxieties about deflation and inflation, but can be alleviated by trading momentum.

Commodities have substance in a bimodal world
Agricultural commodities such as soy are expected to fall during 2012

In an investment landscape more uncertain than usual, asset allocators and fund managers have a tough year ahead. Any outlook for conventional financial instruments stocks and bonds needs to be predicated on a view of the world that has, in the words of bond market sage Bill Gross, managing director of Pimco, shifted from the “new normal” to the “paranormal”.

“A new duality credit and zero-bound interest rate risk characterises the financial markets of 2012,...

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