Charles Schwab's Sonders Favors Commodities Over Equities, But Not for All

Charles Schwab is holding a neutral stance on equities. The firm favors commodities over stocks and bonds, according to chief investment strategist Liz Ann Sonders.

Sonders made the comments in a recent interview, pushing back on what she called “cookie-cutter” portfolio advice. She said allocation should hinge on each investor’s time horizon, risk tolerance, need for income, and overall goals.

No Universal Portfolio

“It actually drives me a little crazy when people give a cookie-cutter answer to that,” Sonders said. “There’s no one asset allocation that makes sense right now.”

Schwab oversees $13.4 trillion in client assets, and Sonders pointed to that scale as proof there is no single right answer for every client.

She was responding to a question about the classic 60/40 portfolio, a benchmark mix of 60% stocks and 40% bonds. Other strategists have proposed carving out a bigger slice for commodities instead.

Favoring Commodities Over Bonds

Sonders said Schwab is less favorable on fixed income. The firm is more favorable on commodities, a stance that echoes a broader shift away from the traditional 60/40 mix.

“We’re neutral on equities, which is not a bearish position,” she added. It simply reflects Schwab’s long-term strategic allocation, not a call to sell stocks.

Gold-backed funds pulled in $18 billion in August alone. That was the second-biggest monthly inflow on record, lifting total holdings to an all-time high.

The figure comes from the World Gold Council, an industry group that tracks global gold demand, cited in a related gold ETF surge report.

One specific split floated by other strategists calls for a 60/20/20 mix, with a fifth of the portfolio in commodities. Sonders declined to endorse any fixed ratio.

However, she said the right percentages depend on each investor’s goals, time horizon, and income needs. The interviewer added that age and investor profile matter just as much.

The debate over stock-bond diversification is far from settled. Whether Schwab’s tilt toward commodities proves prescient may depend on the current cycle for gold and other real assets. That cycle will keep playing out in the months ahead.