Nationwide strategist urges long-term commodity investing over short-term trades

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Long-term commodity investing advice

Highlights

Nationwide's Hackett advocates for commodities as long-term portfolio allocations due to low correlation with equities and diminished bond defensiveness post-2022.
He recommends commodity exposure via companies—producers, refiners, and service providers—citing more stable valuation metrics and benefits from strong refinery margins and AI-driven copper demand.
Hackett advises against abandoning bonds, suggesting moderate commodity allocation since energy stocks remain under 4% of the S&P 500 despite growing structural demand.

Portfolio case for commodity exposure

As reported by Business Insider, Hackett argues that commodities deserve consideration as a long-term portfolio holding rather than a tactical trade tied to the latest market headlines. He says their appeal comes partly from low correlation with equities and from the weaker role bonds have played as a defensive buffer since 2022.

Hackett says investors should avoid trying to call short-term tops and bottoms because commodity markets often move in ways that defy straightforward expectations. He points to volatile oil trading after the U.S. began its war in Iran in February, when an early price surge did not translate into lasting gains for buyers who expected a prolonged disruption.

He adds that several structural trends still support the sector over time. In developed markets, the AI boom is lifting demand for power and industrial inputs such as copper, while in developing economies rising living standards increase consumption of raw materials more broadly, including agricultural commodities tied to higher meat demand.

Why companies may offer a steadier route

Rather than buying futures directly, Hackett says he prefers investing in companies with exposure to commodity markets, including producers, refiners and maintenance providers across the supply chain. He says those businesses can offer a more stable valuation framework because investors can assess them through revenue, operations and cash flow instead of relying solely on daily spot-price swings.

He also highlights industry-specific advantages within the sector. Refiners and related service companies are benefiting from strong refinery margins during the Ukraine-Russia and Iran conflicts, while some gold miners also produce copper, giving them added exposure to demand linked to AI infrastructure.

Some energy companies also provide dividend income, which Hackett says can make them competitive with fixed-income alternatives. Even so, he does not recommend abandoning bonds to chase commodities at current levels, arguing that the better use of the theme is as a measured portfolio allocation in a market where energy stocks still account for less than 4% of the S&P 500.

In our earlier article, we covered Weiss Ratings’ launch of the Resource Trader service, which frames commodities as part of a broader, longer-term upswing across metals, energy, and agriculture. The piece highlighted a focus on precious metals and mining equities—especially junior miners—alongside a wider commodity bull-market thesis tied to inflation sensitivity and shifting supply-demand dynamics.

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