As we all get older everyone needs to ensure our portfolio will outlast our needs. But, have you considered inflation or the price effect of overages and shortages for the one thing we all will need to live....food? In the normal course of events, commodity prices vary by season, need and the ability to supply and transport. These factors all play a role in the final price we pay in the store. Does it pay to have these commodities in your portfolio ? In my opinion, the risks are greater than stocks and bonds since we usually grow the items in some form. They have limited shelf life and we are often at the mercy of other forces for the final production.
The other day I heard a comment by one of the talking heads that noted that the world population may peak around 2040 or 2050 (the best I remember). I found that interesting as I had not considered that possibility and the impact on world economies and markets when demand becomes constant. European countries appear to be relatively close to that point already as their death rate and birth rate are relatively close. Since China implemented the 1 child rule a number of years ago, they may run into the same situation soon, if they are not already close. That leaves, India, the Middle East and Africa continuing to grow. The stat that was thrown out us that normal replacement ( deaths = new born) is 2.3 children per family ( husband and wife). Some areas of the world are above and some are below. This means demands for food may change depending on population shifts. Since we all need to have food to survive, do we have enough area to supply the population in our country ? How will that effect your price in the store ? Will we need to import or export surplus.
See the below excerpt I saw on CNBC that may help decide whether the agricultural commodities are good for you and the effects on how the prices may change.
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