Investing in gold has been a divisive topic for many investors over the years. Iconic stock market investors like Warren Buffett have long eschewed this commodity type as one which is counterproductive to the long-term investor’s goal of keeping up with inflation.
Gold does not pay a dividend and typically under-performs stocks over long periods of time due to the unproductive nature of this asset class.
That said, as we enter a period of time in which deflationary pressures appear to be more pertinent than inflation and yields approach zero for government bonds, the lack of dividends paid out by bouillon and its unproductive status may be overshadowed by its status as a store of value, particularly if we see currency devaluation (of the U.S. Dollar).
For those looking to invest in gold, one Exchange Traded Fund (ETF) I believe offers the best upside to gold buys right now is the VanEck Vectors Gold Miners ETF (TSX:GDX). This ETF tracks broadly the entire gold mining sector, investing in a wide array of precious metals producers focused on gold with operations all over the globe.
From a diversification perspective, this ETF is hard to beat. From a fee perspective, this ETF is also one of the lowest cost ways for investors to gain exposure to the rising price of gold.
Additionally, this ETF allows investors to gain higher beta returns (higher returns than buillon when the price of gold increases and vice versa), due to the operating leverage gold miners provide. I believe gold prices will remain on the ascent for years to come, as the amount of monetary stimulus required to keep us from the next great depression is seriously bullish for precious metals prices.
Invest wisely, my friends.
