"Commodities futures markets are much smaller than the capital markets, so multibillion-dollar allocations to commodities markets will have a far greater impact on prices," Masters said.
We would also stress having an allocation to international, commodity and currency alternative investments in the current environment.
Ritholtz is also concerned with the 15percentt allocation to gold and commodities in Robbins' portfolio, noting that commodities have historically had a negative real rate of return.
Indeed, if you look across expert portfolios, Ivy League endowments allocate funds to commodities, including gold and Harry Browne's permanent portfolio features a significant role for gold, though other allocations tend to exclude it entirely.
These funds are a little more expensive and complications in implementation mean they don't always track the spot price of underlying commodities perfectly, but a small allocation to real assets of 5% or 10% can be helpful in managing risk especially if you're not a home owner (houses are another form of real asset).
Should I invest in commodities? A. Investors could consider an allocation to gold of about 2 percent to 5 percent in a moderate risk portfolio.
Finally, if you are really concerned about inflation, instead of buying high-priced TIPS, consider a small allocation to bonds issued by foreign countries that benefit from rising commodity prices, said James D. Peterson, vice president of the Schwab Center for Financial Research in San Francisco.
They made no allocation to international stocks.
Again, it rewards large resource allocation to a given event.
And then there is a $2 billion allocation to the "Office of National Coordinator for Health Information Technology".
