The rip your face off rally; from March lows has politicians happy, but it comes with a huge price tag.
The U.S. national debt has spiked to 26.5 trillion dollars and continues to climb.
The Federal Reserve is printing money at a pace never seen before.
In the land of a zero-interest-rate policy (ZIRP) physical assets are usually king.
After pinballing back and forth the last 90 days, gold finally broke through a key $1,800 resistance level.
Many sound money investors are surprised that it took this long.
Ten-year Treasury yields are sitting at 0.69%. The national average for interest rates on US checking accounts is 0.21%.
It’s usually a signal for investors to put their money in art, classic cars, etc.
Or even real estate with the average interest rate on a 30-year mortgage is 3.2%.
Gold is the king of physical assets that withstands the test of time. It was used as money as early as 700 B.C. And although you can’t pay for most goods and services with physical gold, it’s easy to exchange it for dollars. That’s not always the case with other physical assets.
Gold usually moves inverse to the checking and savings account yield, it’s usually a good holding as part of a balanced portfolio.
Part of a Well-Balanced Portfolio
The great thing about gold is that there are a number of ways to invest. That might also be the worst part about investing in gold is that there are so many decisions.
For centuries people have been collecting physical gold…jewelry, coins, bars. But the downside is having somewhere safe to hold it. Instead, I suggest investing in miners.
Miners are the ones who get to benefit when the price of gold goes up.
On June 12th, I provided you a quick and easy way to play the upward trend in gold was VanEck Vectors Gold Miners ETF and VanEck Vectors Junior Gold Miners ETF.
Since then they are up17.7% and 20.9% respectively.
And the party is only getting started as investors are beginning to take notice.
Dividend investors are running to companies like Newmont Mining and Yamana Gold. Both are up 11% in the past month.
These are all ways to make some money off the rising gold prices. But the real winner is going to be small miners.
One that’s on my radar is Alamos Gold(NYSE: AGI).
Alamos is a Canadian-based gold producer with three active mines. Two are in Canada and one is in Mexico. The company also has a strong portfolio of development-stage projects in Canada, Mexico, Turkey and the U.S.
The company is in a prime position to take advantage of the rising price of gold. John A McCluskey, President and Chief Executive Officer says it well: "Turning point for Alamos as we transition from a reinvestment phase to a period of strong free cash flow."
Alamos has been investing in expansion with the goal of driving production up and costs down. And was already expecting to see those tangible numbers in the second half of 2020…without gold hitting $1,800.
Plus, there’s plenty of room to get in.
Shares have started recovering in 2020, including increasing 30% over the past month. That’s without pricing in the latest expansion completion and the rising price of gold.
Investors might just overlook this one until the earnings number validates my suspicions.
Shares could easily pass its previous high as it rides the coattails of higher gold.
To your prosperity,
Joshua M. Belanger Executive Publisher & Founder
Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%
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