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Spreading Exposure Key to Gold, Silver ETFs

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"Don't dive blindly into either IAU and SLV: spread exposure."

In response to the upward action from gold and silver, both IAU and SLV have become attractive investment destinations. Though enticing, it is important to avoid blindly diving into either of these funds.

Rather, by appropriately spreading exposure across these shiny metal ETF options, investors can capture the upside potential of gold and silver while getting protection from the risk.

The closely monitored gold-silver ratio has tumbled in recent months and is now sitting around 40. This decline indicates that, while gold is flirting with brand new all time highs, it has been a noticeable laggard compared to silver. These two metals boast different qualities which can help to explain this divergence.

Economic healing has taken hold in many regions of the globe and has helped push silver into the spotlight. Although this metal is often turned to in times of uncertainty, silver is also used extensively by a number of industries. Therefore, this metal is also influenced by the broader market.

Gold, on the other hand, tends to see its strongest performance when fear takes over and demand for risk wanes. The yellow metal has far fewer industrial uses than silver and therefore moves independently of the global marketplace.

When it comes to navigating the precious metals market in the near term, investors should continue to rely on relatively stable gold-related funds such as IAU as their core holdings. Silver, should not be ignored entirely, however. Rather, investors with a taste for risk can turn to a fund such as SLV as a tactical position.< br>
Although the daily spattering of negative media may be disconcerting for many, I urge investors to avoid fleeing the market. Rather, by using ETFs it is possible to weather the current storms and prepare for clearer skies ahead.

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