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Little Update on Commodity Re-Thunk

Reading some of the comments people have posted in various places, I thought it would make sense to spend the time to re-create the projected-index chart in the prior article, but using something approximating GSCI weights. The GSCI is production-weighted, which means it is very heavily energy-linked (I used 2008 weights just because they were the first ones I found: 78% energy, 10% agriculture, 6% industrial metals, 3% meats, 3% precious metals), yet I was comparing its 10-year real return to an equal-weighted "prediction." How much does this change the picture?

As it happens, quite a bit. Here is the new chart (sourced: Enduring Investments).

GSCI Weighted Projection and Actual Subsequent Real Return Chart

 


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