March 2000, smack in the dot-com meltdown. I’m watching the Nasdaq crater and thinking about one of the lessons my mentors drilled into me early: the world doesn’t always go in a straight line, and the assets that do nothing for years can be the ones that matter most when everything else falls apart.

Gold was one of those assets in 2000. Oil became one of those assets in 2022. Both of them had been dismissed, ignored, or outright mocked by the people who were most in love with equities and tech. Then the world shifted, and suddenly people who owned hard assets looked a lot smarter than they had any right to look based on the previous ten years of performance.

We are in another one of those windows right now. And I think it’s worth talking honestly about why commodities deserve a seat at the table in a serious retirement portfolio — and what the pitfalls are, because there are real pitfalls.

The Historical Pattern Is Hard to Ignore

Here’s the rub with commodities: they’re boring and frustrating for long stretches, and then they’re not. Commodities tend to move in long, slow cycles. Years of relative underperformance, followed by a period of explosive activity driven by supply constraints, demand spikes, or external shocks. The trigger is often geopolitical.

Think about the oil embargo of 1973. Think about the commodity supercycle of the 2000s, driven largely by China’s industrialization and global infrastructure spending. Think about gold’s run from under $300 per ounce in the early 2000s to over $1,900 by 2011. Think about what happened to energy prices when Russia invaded Ukraine in early 2022.

The pattern isn’t hard to identify in hindsight. The challenge is always that people want to buy commodities after the move has already started, when the narrative is already on the front page of every financial publication, and when a lot of the easy money has already been made.

The better time to think about commodities is before the crisis is fully priced in. Which is, uncomfortably, right now.

What’s Actually Going On Geopolitically That Matters for Commodity Investors

I want to be careful here, because this is not a political conversation. It’s an investment conversation. The question isn’t who’s right or wrong in any given conflict. The question is: what does global instability do to the supply and pricing of things people need?

Energy markets are directly affected by geopolitical instability. Russia and Saudi Arabia together represent a massive portion of global oil production. The Middle East sits on top of a huge percentage of the world’s accessible reserves. Disruption anywhere in that system moves prices. We’ve seen it happen repeatedly, and the world is arguably more geopolitically fragmented right now than it’s been in decades.

Precious metals behave as a flight-to-safety asset. Gold in particular has a centuries-long track record as a store of value when confidence in paper currencies or financial systems erodes. We saw gold break out to new all-time highs in 2024. There were multiple reasons for that move, and geopolitical uncertainty was one of them. When central banks around the world — including several that have historically been US dollar-aligned — start buying gold aggressively, that tells you something about where sovereign-level anxiety sits right now.

Critical minerals and the supply chain story. This is the one that doesn’t get enough attention. Copper, lithium, cobalt, rare earth elements — these are not sexy commodities. They don’t have the drama of oil or the shine of gold. But they are foundational to the electrification of transportation, the buildout of data centers, and the broader energy transition. And right now, a disproportionate amount of the global supply of several of these materials flows through or is controlled by countries that are in various degrees of tension with the United States. Supply chain risk is a real commodity story in the 2020s, even if it doesn’t feel as immediate as oil prices at the pump.

How to Actually Add Commodity Exposure Without Being Stupid About It

This is where I want to spend some time, because the commodity conversation gets derailed in a couple of ways.

The first derailment is the newsletter/podcast overcorrection. Someone listens to a macro podcast, gets terrified about the dollar collapsing, and puts 40% of their retirement savings into gold. That’s not a strategy. That’s a panic buy dressed up as a thesis. Commodities can and do have significant drawdowns, and they pay no income while you wait.

The second derailment is dismissing commodities entirely because they underperformed tech for a decade. A lot of mainstream financial planning still treats commodities as speculative or peripheral. They are neither, when sized appropriately.

Here’s how I think about it for most clients in the Red Zone.

Broad commodity exposure through diversified vehicles. Rather than trying to pick individual commodities or sectors, a broad commodity index fund or ETF gives you exposure across energy, metals, and agriculture in a single instrument. You get diversification within the asset class and you don’t have to make a specific call on whether oil or gold or copper will be the one that moves next.

Energy sector equities. For investors who want commodity exposure with income potential, energy companies — particularly major integrated oil and gas producers — can offer dividends while providing indirect exposure to energy price moves. This isn’t pure commodity exposure; it’s equity exposure with commodity sensitivity. Know what you own.

Precious metals: physical vs. paper. There are genuine debates about whether physical gold (coins, bars, allocated storage) or financial instruments (ETFs, gold mining stocks) is the better way to own the yellow metal. Without getting deep into the weeds: physical gold is simpler, has no counterparty risk, and has been doing its job as a store of value for a very long time. Gold mining stocks are more volatile and leveraged to the gold price, which means they can outperform in a bull market and dramatically underperform when the story reverses.

Position sizing matters more than anything else. For most pre-retirees with well-diversified portfolios, something in the range of 5–15% in commodity-related exposure is defensible as a hedge and an inflation buffer. Beyond that, you’re making a directional bet that belongs in a different kind of portfolio.

The Timing Question

Every time I talk about commodities, someone asks me: is now a good time to buy?

Nobody ever really knows the answer to that question.  However, it is fairly widely recognized that there are certain fundamental setups that can facilitate a “super cycle”, both up and down, within commodity markets.  And, it just so happens that the current fundamental setup, excessive levels of debt, geopolitical strife, supply chain constraints, and the bifurcation of world trade, along with a trend of a weaker Dollar regime, appears to be the type of setup that may foster in another one of those cycles. The commodity bull can run for another three years, or it can reverse next quarter if geopolitical tensions ease and supply chains normalize. Trying to time commodity cycles precisely is an exercise in frustration even for full-time professionals.

The better question is: does my current portfolio have any meaningful protection against a scenario where commodity prices surge, inflation stays elevated, and the equity market underperforms for several years? If the answer is no, that’s a risk worth thinking about, especially if you’re within five years of retirement.

You don’t need to be right about the timing if you’re right about the structure.

A Word of Caution

I want to close with this: the commodity trade attracts a lot of bad actors. Overpriced gold coins. Non-traded commodity funds with eye-watering fees. Leveraged oil ETFs that look good until they don’t. Precious metal storage schemes with suspicious custodians.

The underlying thesis — that hard assets deserve a place in a retirement portfolio during periods of geopolitical instability and inflationary pressure — is sound. The vehicle you use to execute that thesis matters enormously. Do your homework, or work with someone who has.

If you’re a California executive wondering whether your current portfolio is structured for the world as it actually is right now — not the low-inflation, geopolitically stable world of 2010 to 2019 — I’d be glad to take a look. Visit www.quiverfinancial.com or give us a call at 949-492-6900.

Securities offered through Registered Representatives. Advisory services through Quiver Financial Holdings, LLC. This blog is for educational purposes only and does not constitute personalized investment advice. Investing involves risk, including the possible loss of principal. Commodity investments involve additional risks including market volatility and lack of income. Past performance is not a guarantee of future results.