Mar 04, 2020 (Baystreet.ca via COMTEX) -- I love gold. Right now, given the frothiness of the market, I would expect to see other investors having a similar sentiment, given the massive bubble we’ve seen emerge in pretty much every market folks can put their money into.
In the gold space, there are a number of individual producers I do like, and think have great value today, but ultimately the safest way to play the gold space, in my opinion, is to buy a basket of these companies in the form of an Exchange Traded Fund (ETF). The reality is that individual mining companies do carry extra idiosyncratic risk, and exhibit higher levels of volatility, which is why I would recommend an ETF approach.
One ETF I would recommend investors check out is the VanEck Vectors Gold Miners ETF /zigman2/quotes/206399889/composite GDX +0.94% . This ETF holds a broad range of mining companies focused on gold production, diversifying investor exposure geographically and across various market cap sizes and betas, optimizing an investor’s risk/reward ratio.
Investing in an ETF like this gives investors more exposure to the price of gold (additional leverage, if you will) over buying gold bouillon itself or another ETF tracking the price of gold.
I’ve always recommended investing a portion of one’s portfolio in gold or gold-related companies as a hedge, and the VanEck Vectors Gold Miners ETF is an excellent option for all investor types to do so.
Even a small percentage of one’s portfolio dedicated to assets that are inversely related to stock prices can be beneficial to smooth out portfolio returns over time.