Building a Precious Metal ETF Portfolio
By Don Dion
TheStreet.com
08/23/11 - 06:00 AM EDT
NEW YORK (TheStreet) -- Not surprisingly, amid the weeks of economic turmoil, gold has been thrust into the spotlight. With prices flirting with the $1,900 per ounce level, it is no wonder that investors are clamoring for exposure to this yellow metal.
Gold is not the only member of the precious metal spectrum that has benefited from the resounding market uncertainty. Although its use as an input across a number of industries often causes it to perform in line with the broader markets, more recently investors have been turning to silver in hopes of sheltering against upheaval as well. As a result, silver-backed ETFs have powered higher. The popular and closely watched iShares Silver Trust(SLV_) had enjoyed seven consecutive days of upward action.
Given the excitement surrounding gold and silver, it may be tempting to increase exposure to any and all precious metals available. This, however, is likely not the most ideal investing strategy for those looking to maintain a stable, long term allocation to this corner of the commodities market.
Rather, investors would be best off targeting these commodities using a combination of physically backed bullion ETFs and equity-based miner funds. This multi-faceted approach will help ensure that investors are both well-positioned to defend against market weakness and profit when the markets eventually witness a turn around.
I have long encouraged investors to look to gold ETFs like iShares Gold Trust(IAU_) and SPDR Gold Shares(GLD_) as long-term portfolio staples. I feel that with the launch of these products, gold has evolved into an asset class of its own and, like stocks and bonds, should always be included in a well-balanced investment portfolio.
In the same vein, it is crucial to avoid getting carried away with any single position. Exposure to IAU, GLD, and other physically-based gold ETFs should be kept relatively conservative in order to avoid sacrificing diversification.
Full story: http://www.thestreet.com/story/11227177/1/building-a-precious-metal-etf-portfolio.html
Gold is $1,581/oz today. When it hits $2,000, it will be up 26.5%. Let's see how long that takes. - De 3/11/2013 - ANSWER: 7 Years, 5 Months
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