By Dennis Tilley, Director of Alternative Investments
Published On 12/17/2010
Commodity prices are rising again, led by sugar, copper, corn, wheat, and silver. Demand from emerging countries is the typically-stated reason, with an assist given to the Federal Reserve recently announcing a second round of quantitative easing (a euphemism for printing money).
Whenever you read about soaring commodity prices, it’s usually too late to profit from the trend. Traders have already factored the latest news on supply, demand, weather, and trade policies into futures prices. This is the simple reason why we avoid a commodity allocation in our client portfolios.
There are actually a few more complicated and subtle reasons to exclude commodity funds. If you’re interested in those reasons, read this article: “Why We Still Don’t Favor Commodities.”
Since writing that article, commodity investors have only experienced gut-wrenching volatility and losses. Now the media is starting to notice and write about the fallacy of these funds – one of my favorite articles on the topic was published in Business Week. Read it here.
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By Dennis Tilley, Director of Alternative Investments
Dennis serves as Lead Portfolio Manager for the Leveraged Global Opportunity Fund, L.P., a role he has held since 2001. Since joining Merriman in 1999, Dennis has also served as Director of Research (2000-2008), Director of Alternative Investments (2008-2013, 2019-present), and Chief Investment Officer (2013-2018). He sits on the Merriman Investment Committee and served on the Merriman Board of Directors from 2010-2012. Dennis currently writes for a blog about investing and trading at assetclasstrading.com.
Prior to joining our company, Dennis spent eleven years as an engineer performing research and development in electric propulsion. He published many papers and won numerous awards and patents in the field. Dennis holds a master’s degree in mechanical and aerospace engineering from Princeton University, as well as bachelor’s and master’s degrees in aeronautics and astronautics from the University of Washington.
Away from work, Dennis enjoys rock climbing, golf, running, reading about history, traveling with his wife, and spending winters in Tucson, AZ. He has two grown children."
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