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Rally in commodities is expected to continue: What will drive it, the outlook, what investors should do

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Since investing in commodities can be a different ball game, investors need to take extra precautions.

Synopsis

Since investing in commodities can be a different ball game, investors need to take extra precautions. Before jumping in, investors should note that commodities have already rallied in 2020 and therefore, should rein in their return expectations in coming years.

Global liquidity, fuelled by central banks and governments, has lifted all asset classes. But funds have flown mainly into debt and equities. The debt market rally has taken more than 25% of the global investment-grade papers into negative yields— investors are paying interest to hold them. Similarly, the equity market rally has taken prices to new all-time highs.However, the rally in commodities is far from over. Prices rose smartly in 2020,

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