Want to invest in gold miners? Consider Evergreen’s Precious Metals Fund (EKWAX), which is up 17% on average over the past 10 years, compared with the S&P 500’s -1.5% avg performance. So if you invested $10,000 in this fund 10 years ago, it’d be worth over $40,000 today, compared with a basically flat S&P. That’s incredible performance, consistently beating it’s peers.
Chasing past performance is usually a bad idea, especially with mutual funds. But this is a unique period in America’s history. We have unique risks like hyperinflation, and the only-whispered possibility of dollar collapse. Plus, gold stocks have taken a beating over the last year. EKWAX is down from a high of $81 to $46 today. So at least you’re not buying in at the very top.
Every investor should have some exposure to precious metals. There are a few ways to achieve that: physical ownership of bullion (coins/bars/grams), stocks, or mutual funds like EKWAX. Picking individual gold stocks is hard. It’s a specialized field, and requires a lot of industry-specific knowledge. I’d rather pay 1.x% to have an expert like Evergreen’s Michael Bradshaw manage it. He also has the option to buy preferred stocks, which are difficult for small investors to buy.
Isn’t gold for whackos and conspiracy theorists?
Gold and precious metals are arguably the best hedges against inflation (and the unspeakable; a currency collapse). Gold has been the world’s most important store of wealth for thousands of years. Some people suggest putting 10-15% of your investable assets into gold/metals, some suggest more.
People may give you strange looks when you mention gold as an investment (especially your broker/financial-advisor). Listen to what they have to say, but be skeptical and do your own research. There’s a growing number of people who believe that gold has been slandered by parties who have a vested interest in its decline/stagnation. Gold is viewed as competition to the dollar by some, and there are strong forces that want to maintain the status quo (dollar dominance). If you want to learn more, go to www.gata.org and browse around. They get somewhat conspiracy-theorist at times, but I enjoy reading content like this. Take with plenty of salt and skepticism, and make your own decisions. And check out the full-page ad they put in the Wall St. Journal, titled “Anybody Seen Our Gold?”. Very interesting stuff, especially if you enjoy a good controversy like me.
Disclaimer: This is not financial advice, always talk to a certified professional before making any investment decisions. I have no relationship with Evergreen investments, other than owning one of their funds. Nobody reads this blog, so it doesn’t really matter.