So, if not AAA, tax-free, index-linked bonds, what do people do with their £££ ? Commodities have been the big story for several years now, what with oil hitting $147 in '08, and food prices also soaring that year: and then there's Mr 'Cocoa' Ward in the news.
At the end of last year, devotees of the 'V-shaped recession' theory reckoned that commodity prices, seen as a leading indicator, must surely go storming ahead. Well, the figures for 1st Half 2010 are now in, and they didn't. [source: Goldmans / Reuters]
Inevitably, most punters don't invest in physicals - where would they put it ? - but use commodity funds based on futures contracts. Gold & Silver aside, the only commodities to do well on this basis were coffee and cattle.
Everything else did badly or indeed very badly. One of the problems is the cost of 'rolling' each month, from the expiring futures contract to the next one. Wiki calls this the 'roll yield' and starts by explaining how it can make you money ... when the forward curve is in backwardation. But of course you lose money when it's in contango. And on average ? Since 2000, the Goldman Sachs Commodity Index has shown a negative roll return in all but 23 months, i.e. 80% of the time, losing on average around 1% per month; and it's been that way all this year so far.
That's a big disadvantage to carry into the game. What's a retail punter to do ?
Which brings us to, *ahem* ...
* for the avoidance of doubt, 'ahem' does not constitute advice