The Benefits of Physical PM Ownership VS The Derivatives

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Summary points:

  • GLD and SLV have no advantages whatsoever against owning physical precious metals, when considering all factors, including costs for physical storage.
  • The general mining indexes do not measure up when compared to the prices of gold and silver.
  • If you are going to invest PM miners, we provide three key points to consider in your individual stock choices.
  • Pick strong individual stocks in each sector, and stick with them; avoid the indexes because your portfolio will under-perform relative to the physical PM price returns.
  • Five things to watch out for when choosing a provider for your PM vault storage


We discuss the benefits of owning the physical precious metals, versus all of the various derivatives that exist. We cover the following topics:

  • Gold and silver vs: the SPDR Gold Trust ETF (GLD) and iShares Silver Trust ETF (SLV), the stock indices, and the leveraged spot price indices.
  • We cover an earlier discussion as to why owning GLD and SLV in your portfolio are fraught with risks.
  • We discuss why it would be better, if you want to own PM stocks, to do the work yourself on finding solid companies versus spreading exposure to multiple stocks through the ETFs.
  • The three key factors to valuing companies are: management, project feasibility, and jurisdiction (location of the project and the company office).
  • Some silver companies we discuss are Fresnillo (FNLPF), MAG Silver (MAG), SilverCrest (SILV), Pan American Silver (PAAS), First Majestic (AG), and Impact Silver (ISVLF).
  • Why the junior resources miners have not been getting money since 2011 high in gold price, and why needs to change to make those junior miners attractive as a whole.
  • When picking a secure vault provider for physical metals, what the five main components you need to check first before storing your metals through them.

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