Read this before you jump on the commodities bandwagon

— -- Q: I keep hearing that I need to have commodities in my portfolio. Do I really?

A: Name just about any commodity, and prices have been soaring.

Oil. Corn. Steel. The story is the same.Growing worldwide demand for basic materials, and a weak dollar, have driven up prices. And that's causing investors to wonder whether they need to add commodities to their portfolios.

But, before you jump on the bandwagon, be aware of the risks. Remember when you buy a commodity, you're not buying something that generates earnings and profit. You're buying a hard asset and hoping another buyer will be willing to pay more for that asset in the future.

That's very different than buying a stock, says Mark Hebner of Index Funds Advisors in an e-mailed response. Companies, on average, increase their profits 10% a year. That's a big reason why their value, or stock price, on average increases 10% a year.

By contrast, "a 10-ounce bar of gold in 1930 is still a 10-ounce bar of gold in 2008," Hebner says. "So, you are left with the speculation of future prices as the only way for you to profit." Hebner says studies have shown the expected return of speculation is zero.

If you'd like to read more about commodities and whether or not they belong in your portfolio, highlights from a study by Truman Clark, former professor at the University of Southern California, are summarized here.

Matt Krantz is a financial markets reporter at USA TODAY and author of Investing Online for Dummies. He answers a different reader question every weekday in his Ask Matt column at money.usatoday.com. To submit a question, e-mail Matt at mkrantz@usatoday.com. Click here to see previous Ask Matt columns.