Precious metals investors have a wide range of options to choose from- of course there is more than just gold investors can look at, and when considering the wide range of options available to every investor out there across Canadian exchanges only (namely the TSX and TSX venture exchanges), investors looking for Canadian gold/silver/precious metals exposure will see there are hundreds of options to choose from.
It is mostly for this reason that I would recommend investors consider an exchange traded fund (ETF) when considering buying precious metals miners.
Buying companies that mine gold, silver or other precious metals offers investors more leverage to the price of these underlying metals, as compared to buying the physical bouillon itself, or an index ETF/futures on the underlying metal.
Junior miners, companies tracked by the Van Eck Vectors Jr. Gold Miners ETF (NASDAQ:GDX) are more risky than traditional large gold producers, but when buying a large basket of said companies, one can provide a better return over long periods of time for investors seeking a long-term position in precious metals with some growth potential.
These are companies engaged in the exploration and development of sites expected to hold precious metals; thus, these companies are by nature high volatile - a significant group will go bankrupt, and a few will have massive gains (those that do strike gold on their properties), so owning a basket of these companies is the only real way I would ever recommend conservative investors touch this sector altogether.
I do believe that gold and silver reserves, in particular, are key assets which are becoming more and more rare (and harder to find), meaning future precious metals reserves are likely to be valued continuously higher, making now a great entry point for those seeking exposure to this sector.
Invest wisely, my friends.
