Loading ...Gold Royalty As better LT investment
Looking back it would have been better to invest in gold royalty stocks rather than bullion only and trade miners on short term.
Gold performance from bottom of 2004 to todate:
$418 to 1335 = 3.2 times
RGLD stock from $15 to 82 = 5.46 times
Inspired by this article:
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My hunch is that the royalties do relatively if not absolutely better, when the sector is in a bear market, as they then would have more leverage over smaller miners seeking capital to advance their projects.
During a bull run, the royalties still do fine, but have trouble negotiating great deals.
Lately our experience is that bear market lasting lot longer than bull market. If one looks at the same time span for large miners they have not performed well.
For investors that want to take some risk, take a look at TEN, they have a 2.5-3% royalty on ex-ABX property now in the hands of of VC fund, Waterton. Once more public news available about this royalty this company should get re-rated as other small royalty players have been. And at least its located in Nevada.