Assessing Physical Commodities in a Diversified Portfolio

As an investment analyst, you are evaluating investments in physical commodities as part of a diversified portfolio for a wealthy client. Physical commodities include raw materials such as gold, oil, and agricultural products. Discuss the benefits and risks associated with investing in physical commodities, and explain how they can complement a traditional equity and fixed income portfolio. In your response, consider factors such as market dynamics, liquidity, and the impact of global events on commodity prices.