Weve been living through some amazing times.
Weve been in an era of easy money for more than a decade now. Unprecedented.
But the future is more in doubt than ever.
It makes sense to save something for our future. For the next phase.
So, it may surprise you to learn that these gold and silver exchanged-traded funds (ETFs) Im going to share with you saw triple-digit returns over the past two years alone.
And theyre not done.
But first
The price of gold is rising.
And theres an important chart to watch.
Its the U.S. dollar index. It shows the value of the dollar, priced against six other currencies. Such as the euro and the Japanese yen:
(Source: Bloomberg)
When the index is rising, the dollar is gaining value versus its peers. But when its falling like it is now its depreciating.
When the dollar falls, items priced in it tend to rise. For example, the market prices gold and silver in dollars.
Take a look at the price of gold versus the U.S. dollar:
The dollar doesnt move as much as stocks. Thats why the moves arent proportional.
But you can see the direction of the two assets is the opposite.
This move lower in the dollar is the largest weve seen in a few years.
And it could continue.
You see, Federal Reserve Chairman Jerome Powell has made it clear that he and his team arent going to support the dollar by raising interest rates.
In early June and again in late July, he said: Were not even thinking about thinking about raising rates.
If Powell says he is raising rates, I assure you the dollar will rise. But he says that isnt likely to happen for years.
Dont make investing any harder that it has to be.
The price of gold and silver is rising.
Owning the companies that pull these metals out of the ground is a good idea.
Over the past two years, six ETFs that own gold and silver miners have more thand doubled.
Take a look:
Fund | Ticker | Price | Total Return | Market Cap |
iShares MSCI Global Gold Miners ETF | RING | $35.70 | 160% | $582 million |
Sprott Gold Miners ETF | SGDM | $36.83 | 143% | $308 million |
VanEck Vectors Gold Miners ETF | GDX | $42.79 | 141% | $18.5 billion |
U.S. Global GO Gold & Precious Metal Miners ETF | GOAU | $24.47 | 136% | $127 million |
iShares MSCI Global Silver and Metals Miners ETF | SLVP | $17.27 | 123% | $250 million |
Global X Silver Miners ETF | SIL | $48.54 | 112% | $1.1 billion |
(Source: Bloomberg; as of 9/15/20)
The first four names on the list focus on gold producers and royalty companies, and the last two on silver.
Either way, the government is pushing up the price of the metals they produce. Thats good for these ETFs.
And the performance isnt a fluke. Five of these names have been around for five years. (GOAU began trading in 2017.)
Over that five-year stretch, they have seen total returns between 175% and 262%.
So as long as the dollar is weak and precious metals are in demand, it makes sense to have some exposure to names such as these.
I get it. You may not be used to the government helping you. But in this case, it is.
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