ANTS

Commodities: On the Downhill Slope?

I handle the allocation question by reference to a risk reward ratio, similar to say a Sharpe ratio or Sortino ratio. Six months ago these ratio's implied to me that the resources area was favorable and deserved a higher allocation. While the outlook for commodities probably hasn't changed that much, the stock market risk/reward structure has, and it is appropriate to scale back the allocation to resources until these ratio's become acceptable.

The other thing is the psychology of seeing stocks fall 10% in one day and recover 6% the next day. It is very very hard to maintain investment discipline while moves of this magnitude occur on a regular basis, and I would rather have my mind (and pocket) free of the distraction.