Break free from the herd

In the Specialist sector, eye-popping gains in commodities have not benefited retail investors as much as expected. Perhaps better returns lie further off the bandwagon-beaten track

Retail investors are often accused of falling behind the curve as they inevitably end up piling into areas that are beginning to get hot or are already valued up. Their herd mentality frequently renders them susceptible to losing out on a lot of upside and, importantly, they remain vulnerable to capturing the lion’s share of the downside. Commodities, part of the IMA Specialist sector, is an area where a strong, multi-year bull market ended in mid-2008. Three sub-sections within this eclectic peer group – natural resources, energy and precious metals – posted eye-popping gains but retail...