Opinions
David Cockfield
iShares Gold Bullion ETF
CGL-T
WAIT
May 27, 2016
$10.690
Stock price when the opinion was issued
E.T.F.'s
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COMMENT
He likes gold in small amounts in a portfolio, not expecting it to appreciate a lot. Over the long haul, gold just sits there and is de-coupled from the stock market. Gold offers diversification. He holds very little gold. CGL is currency-hedged and is the biggest and most liquid gold ETF in Canada.
E.T.F.'s
SELL
Gold makes sense as a small part of many investors portfolios as an alternative asset class. In the recent market panic gold rallied quite a bit. Thinks perhaps it rallied too much. A small position in gold or other precious metals no more than single-digit % could make sense purely as a diversifier. As a long term buy and hold he would suggest to trim. If you look at the producers he would look at them just like any other equities, look at their book, the management, debt to equity ratio, geographic risks, etc.
E.T.F.'s
BUY
Good resource sector ETF?
It's such a broad sector, from energy to oil-related to materials to gold or uranium.
The most popular one related to the energy index is probably XEG. Exposure to most of the larger Canadian energy producers like CNQ, SU, etc.
What's catching his eye more right now is CGL, the gold bullion ETF. Recently broken out. He can see a scenario where gold moves higher to $2600 or even $3000 over the next year and a bit. Avoids the issues that come with mining in certain jurisdictions. Good way to play exposure to gold and to the commodity market in general.
E.T.F.'s
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iShares Gold Bullion (CGL-T) or iShares Comex Gold (IGT-T)? This one probably meets your needs, however thinks it is too early for gold. Gold had quite a little rally. If the Fed raises rates and the US$ strengthens, which it will, gold will take a hit. Gold has really worked in the past because of inflation, and we really don’t have that yet. Central banks globally are working on getting inflation going, and it is probably going to start in the US first. Before then, it is pure speculation.