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Mining for Value with Safe Money Report

06/02/2020 5:00 am EST

Focus: COMMODITIES

Mike Larson

Editor, Weiss' Safe Money Report

Gold is shining while stocks disconnect from reality; I plan to stick with a conservative, defensive approach rather than try to chase market moves to the upside, suggests Mike Larson, editor of Safe Money Report — and a participating speaker at MoneyShow's Virtual Event on June 10-12.

Beyond the stock market, you can clearly see investors remain worried about the very real, very severe pain being inflicted on the economy.

They're flocking to gold and mining shares, which are closing in on eight-year and seven-year highs, respectively.

For exposure to precious metals miners, we recommend by adding a position to the VanEck Vectors Gold Miners ETF (GDX).

With a relatively low expense ratio of 0.53%, total assets of around $13.7 billion and 50 of the world's largest mining firms on its holding list recently, GDX is truly the "gold standard" of mining ETFs.

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Top holdings include industry giants Newmont Corp. (NEM) and Barrick Gold (GOLD) as well as royalty and streaming favorites like Wheaton Precious Metals (WPM) and Franco-Nevada (FNV).

Canada-based firms make up about 52% of the GDX, followed by U.S. miners at 20% and Australian firms at 13%.

From a technical perspective, GDX spent the last several years carving out a massive rounded bottom pattern. It's now breaking out from that pattern, something that opens the door for a move back toward the old highs.

My plan for our Dynamic Income Portfolio is to help you profit from that by rebuilding your positioning in mining shares. As such, I recommend an initial position in the VanEck Vectors Gold Miners ETF.

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