Gold And Silver Stocks Down In 2Q 2013 Along With The Metals Themselves

Precious Metals and Mining during 2Q 2013

Disclaimer: Both myself personally and the clients we manage may invest in IVV, VGPMX, IAU and SLV.

I’ve written elsewhere that it is better to invest in precious metal mining companies than the metals themselves. Precious Metal Mining companies are leveraged against the movements of the underlying price of the metals themselves. Second quarter 2013 saw the price of the metals tumble sharply sending the mining companies down as well:

  • Vanguard Precious Metals and Mining Fund (VGPMX) was down 23.00% during the second quarter, but still averaging 7.41% for the last 10 years.

As bad as the drop in mining companies was, it was still not as bad as the drop in the price of the metals themselves:

  • iShares Gold Trust (IAU) was down 25.48% during the second quarter.
  • iShares Silver Trust (SLV) was down 34.22% during the second quarter.

Here is a chart showing the movement of the price of gold during the second quarter of 2013:

Price of Gold during 2Q 2013

We suggest that you limit your investment In gold and silver to less than 3% of your portfolio. In truth, the optimum asset allocation to gold and silver as metals is always zero.

This article was co-authored by Austin Fey.


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s