Gold or Coal: Which Fits Your Stocking Best?
If you really are bad this year, you might get a lump of coal in your portfolio.
The largest fund tracking the coal industry, Van Eck’s Market Vectors Coal ETF (KOL) has seen YTD declines of -22.8%, and well over a 50% slide from 2009, when its price hit a high of $37.31.
Major funds are also under pressure to drop coal industry holdings from their portfolios. For instance, California legislators want to force the state’s massive pension funds such as CalPERS to divest any coal holdings.
It’s a reversal from just a couple of years ago, when coal investments were great gifts.
Executives at Walter Energy might be wishing for a visit from the ghost of Christmas Past -- from 2011 to be exact, when the coal company’s stock reached $141. The stock is currently trading at $1.40.
Hopefully you can find some gold in your stocking instead, as the precious metal is finding its luster again as a safe haven among investors after months of receding values.
The SPDR Gold Shares (GLD) was once the world’s largest ETF, and the fastest ever to hit a billion in assets. But a strong dollar and a robust equities market led investors away, and it lost more than half of the $76.7 billion in assets it possessed three years ago.
But the fund is slowing climbing back from a year low of under $110 in November, as many investors find current equities markets and oil too volatile for their tastes. Other funds tracking gold are experiencing a similar narrative.
COMEX gold futures were trading at $1197.2 per ounce on Dec. 19.
Just a helpful reminder from FINRA as you pan for nuggets this holiday season: Be wary of precious metal touts bearing gifts.
The regulatory agency notes that precious metals might be presented as low risk or safe investments. Investors should always ask for and read risk disclosure statements first before buying. Things to look out for when investing in gold and other precious metals, FINRA says, are excessive leverage risk and fees. -- Suleman Din