Philip, there’s 3 asset classes that investors use, Stocks, Bonds and commodities. I’ll not make a big long boring speech, so maybe just go back about 100 years -
There’s always a leader, the flavour of the period that investors, maybe herd-like, run to in order to achieve further gain on their hard earned wealth.
Inflation, disinflation (period of benign inflation) and deflation is the environment in which that investor is acutely aware.
After WW1, inflation was strong (Germany suffered from hyper inflation, many believe that influences EU policy to this day) - so in that environment Commodities were king, common sense told the investor that there was where to invest as a hedge against inflation.
Then in the 20’s things settled down to a period of disinflation, returns from commodites were losing their sparkle, the investor looked elsewhere, the stock market became king.
We know the story FE told us about the postman and stocks, so when deflation took hold and the stock market went down hill then the Bond market was the only safe have - pre WW2
WW2 has the effect of resuscitating the stock market ( I often told the J Livermore story of WW2 outbreak and the stock market and US Steel) - that lasted right up until I was a kid - Ah… the heyday of the 60’s and early 70’s
But that’s what happened, our Govt said ‘you never had it so good’ (bet if you google that), and we didn’t.
But you know what comes with all that spending and earning - inflation, and it came with a bang.
Back to the commodities ran the investors, really scared that inflation would eat away at their wealth, stocks lost their leadership.
Up went our best known commodity, that famous black stuff (I’m speaking of Guiness, it was around 30p per pint) and so also oil.
I’ll finish later