Schwab's Sonders Picks Commodities Over Stocks, But She Won't Do It for You

Should you be dumping stocks for commodities right now? Charles Schwab's answer is a shrug, followed by a caveat.

Liz Ann Sonders, the firm's chief investment strategist, says Schwab is neutral on equities and tilted toward commodities over both stocks and bonds. That's a real position. But here's the part most headlines skip. She doesn't think it's a trade for everybody, and she's openly annoyed at anyone pretending otherwise.

The Call

Neutral means neutral. Schwab isn't telling clients to bail on the S&P 500 after back-to-back years of 20%+ gains. The firm is saying the risk-reward has flattened out, so the edge sits somewhere else.

Commodities are where Schwab sees better relative value. Think gold, oil, copper. The stuff that pays no dividend and doesn't care about earnings multiples.

Sonders pushed back on what she called cookie-cutter portfolio advice, according to a recent interview. Allocation, in her view, comes down to four things. Time horizon. Risk tolerance. Need for income. Overall goals. No universal fit. No single percentage that works for a 28-year-old stacking sats and a 68-year-old who needs cash flow every month.

That's a big deal. Most strategist notes end with a tidy number. Schwab's doesn't.

Why Commodities, Why Now

Look at the tape. Gold ripped through $2,700 in late 2024 and kept grinding higher, up more than 25% over the past year and dusting most equity sectors. Copper's had wild swings on supply tightness and AI data center demand. Oil's the messy one, stuck in a range while OPEC+ fiddles with output.

Commodities historically do their best work when inflation reaccelerates or the dollar weakens. Both are live risks right now. If tariffs push input costs higher, real assets catch a bid. If the Fed cuts into a still-warm economy, same story.

But here's my take. Chasing commodities after a two-year gold run isn't the same trade as owning them going in. Schwab gets credit for not pretending otherwise.

What the Pros Are Saying

Traders are watching closely. Not because Schwab is huge in commodities, but because a neutral equity call from a firm this size is a signal. Schwab holds trillions in client assets. When it softens on stocks, retail flows shift.

The counterargument is loud. Commodities generate no earnings, no dividends and no yield. Futures rolls bleed money in contango. Gold pays you nothing for holding it. For income-focused retirees, that's a non-starter.

Which is exactly Sonders' point. A commodity sleeve makes sense for some investors. A full rotation makes sense for almost nobody.

What to Watch Next

Three things. First, the CPI prints. A hot number keeps the commodity bid alive. Second, the dollar index. Below 100 and gold has room to run. Above 105 and the whole trade gets heavy. Third, watch whether Schwab's neutral call survives the next Fed meeting and the next round of tariff headlines.

And keep an eye on bitcoin, which is trading like a hybrid right now. Part risk asset, part digital gold. If commodities keep outperforming, crypto's hardest money pitch gets louder.

The market's verdict: Schwab isn't bearish. It's just done being generic. That's a harder message to sell. It's also a more useful one.