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Vanguard Precious Metals and Mining
Old 10-29-2008, 03:42 PM   #1
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Vanguard Precious Metals and Mining

I have been wanting to add a small allocation of precious metals (3-5%) to my portfolio for a while. Unfortunately, gold has appeared overpriced to me so I have been unwilling to buy in.

However, I note Vanguard Precious Metals and Mining (i.e. the underlying equities) has been hammered, down about 60-70%. However, gold has not dropped much at all. Obviously to collapse of other commodities (copper, etc) has affected the price.

I bought in today for a 0.5% position. Am I stupid? What do you think? I plan to add an additional 2.5% over the next month or so.
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Old 10-29-2008, 03:50 PM   #2
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I've been wanting to add a small amount of that fund to our portfolio, but it's been closed to new investors for the past few years. Now that it's dropped significantly, I'm hoping that Vanguard will reopen it.
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Old 10-29-2008, 03:54 PM   #3
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I have been wanting to add a small allocation of precious metals (3-5%) to my portfolio for a while. Unfortunately, gold has appeared overpriced to me so I have been unwilling to buy in.

However, I note Vanguard Precious Metals and Mining (i.e. the underlying equities) has been hammered, down about 60-70%. However, gold has not dropped much at all. Obviously to collapse of other commodities (copper, etc) has affected the price.

I bought in today for a 0.5% position. Am I stupid? What do you think? I plan to add an additional 2.5% over the next month or so.
I think it is hard to go wrong putting 3% of a portfolio in a low cost well diversified pool of equities that has been hammered as severly as mining equities have. I prefer base metal operations, as they usually sell on their merits as businesses more than gold equities do. But it doesn't metter, either should do well and might do spectacularly.

Look at it this way- if every miner got nationalized it would cost you 3%. Not going to happen, but still, big deal. OTOH this position could easily expand to be 10 or even 12% of the portfolio should boom times return.

Ha
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Old 10-29-2008, 04:13 PM   #4
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I've been wanting to add a small amount of that fund to our portfolio, but it's been closed to new investors for the past few years. Now that it's dropped significantly, I'm hoping that Vanguard will reopen it.
Must be opened, I just bought in for the first time today.
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Old 10-29-2008, 04:25 PM   #5
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Must be opened, I just bought in for the first time today.
Interesting; I just checked, and Vanguard's website still shows it as closed. :confused: Think I'll give them a call tomorrow.
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Old 10-29-2008, 05:32 PM   #6
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Interesting; I just checked, and Vanguard's website still shows it as closed. :confused: Think I'll give them a call tomorrow.
I am a flagship member. That may be a factor.
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Old 10-29-2008, 07:21 PM   #7
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You can also invest in the ETF GDX at low expense. And if you can access it, although I'm generally not a fan of USAA funds, their precious metals fund is one of the best on the planet despite the expense ratio.

I actually target 4% of my AA to gold miners.
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