Are gold and commodities good hedges to hold in a portfolio?

Gold and commodities can diversify a portfolio because they sometimes move differently from stocks and bonds, but they're best in small doses and shouldn't be confused with a core holding. Gold produces no income – no dividends or interest – so its return depends purely on price changes, and over very long periods it has trailed stocks while still offering some protection during inflation scares or crises. Broad commodities (energy, metals, agriculture) are volatile and tend to spike during inflation, which is when they're most useful, but they can languish for years otherwise. If you want exposure, low-cost funds are simpler and cheaper than holding physical metal. A common approach is keeping any such allocation modest – often well under 10% – so it can cushion certain shocks without dragging down long-term growth. For most investors, a diversified stock-and-bond mix already does the heavy lifting.