When you first look beyond stocks, investing in a basket of commodities can seem tempting. After all, most commodities hold their value against inflation in the long run. A general commodity ETF also appears to offer diversification benefits over a few precious metals. After closer inspection, you’ll see that commodity ETFs are poor substitutes for gold and silver that you hold directly.

The first problem with commodities is the way that Wall Street works. Commodity index ETFs don’t actually hold real goods. Instead, they buy futures and other financial instruments. Commodity ETFs often badly underperform commodity prices because of things with fancy names like contango and backwardation. It’s just another Wall Street game that you are better off not playing.

Looking at the United States Oil Fund ETF (USO) gives us an idea of what commodity ETFs really cost investors. That ETF is designed to track the daily price movements of West Texas Intermediate Crude Oil. The price of West Texas Intermediate fell from $103 to $53 over the last five years. USO was at $38 in June of 2014, so we would expect it to fall to about $20. In reality, the USO ETF plummeted to below $12! That’s an additional decline of more than 40%! Commodity ETFs based on financial instruments are for speculators betting on daily price changes rather than long-term investors.

The second problem is that other commodities are far more likely to lose their value than precious metals. Holding an S&P 500 ETF is less risky than owning a handful of stocks, but commodities are different. Precious metals are actually safer because they are elements on the periodic table. Gold, silver, palladium, and platinum cannot be artificially created using present technology. On the other hand, scientists are continually finding better ways to produce synthetic diamonds and turn coal into oil.

Finally, a commodity ETF is part of the stock market and subject to all of the same disruptions. You cannot buy, sell, or trade ETFs when disasters shut down the market. This is a strong argument for stocking up on real food and other necessities to deal with potential catastrophes. Unfortunately, most people only have enough storage space for a few weeks or months of supplies. Physical gold and silver are a better way to prepare after you have enough of the basics.

All the attempts to replace precious metals with other commodities have failed. Wall Street wizards are great at making money for themselves, but their commodity index ETFs are not so great for investors. Medieval alchemists might have been good at making money for themselves too. We now know that their attempts to turn lead into gold were doomed to failure. Modern science is much more effective at finding ways to lower the cost of other commodities. Precious metals remain the best way to preserve wealth outside of the stock market.