Hi Semillon There are 4 ways to gain exposure to gold 1)...

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    Hi Semillon
    There are 4 ways to gain exposure to gold
    1) Physical gold- certainly merits there against paper gold if you can handle the safety issue (and authenticity)
    2) Gold ETFs (GOLD, QAU, PMGOLD, GDX)- more or less mirror gold performance except GDX is a basket of top global gold companies
    3) Local and foreign bluer chip gold producers- NEM/NST/EVN/SAR/KLA/WGX - they are already producing gold, making money and even paying dividends - they have a leverage over gold performance and they have shown to be able to even perform well when gold is not making a move or consolidating
    4) Junior gold explorers eg BC8, CHN - they are higher risk because they are not producers and there is no certainty they will find the grade of gold to make their mine feasible but yes there can be exuberant play at the lower end and junior gold stocks have put on even 1000% during a gold mania but they can conversely drop more if gold price were to tank.

    I reckon its good to have all 4 and with the juniors, you dont need a lot of it if they are going to be the multibaggers you hope them to be. Personally, I am weighted 2/3 in (2) & (3) and 1/3 in (4). The likes of NST and KLA creates shareholder value in the long term even if gold does not rise meteorically. Gold explorers may have the promise of gold but other than exuberant speculation, they may end up with nothing. And as I indicated, Gold and gold stocks should be viewed as an Insurance (Long term) so if one is to view Long Term, you can't possibly just hold specky gold explorers. And the last thing you would want is to have Gold shooting the lights out > $2000/oz and the junior gold explorer you own does not make the grade and missing out the gold upside completely. That said, I am very positive on both BC8 and CHN and I actually own more of those than EVN or SAR.
 
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