As Christian Magoon notes in the Financial Advisor magazine, GLD and AAPL are each "in a sweet spot of late." On Apple's side of the ring, the beloved company just released its latest iPhone to a throng of queued customers. On gold's side is the Federal Reserve, with its announcement of a third round of quantitative easing.
Investors shouldn't "fight the Fed" this time, as GLD was declared the winner in the latest round. The gold ETF has been on a "performance hot streak," as the price of gold increased nearly 9 percent in four weeks with the "anticipation and fruition of QE3," says Magoon.
Precious metals stocks have also participated in this golden rally. As you can see below, the Gold and Precious Metals Fund (USERX) and World Precious Minerals Fund (UNWPX) have increased considerably over the past month compared to AAPL. Gold stocks experienced a dip in August, but quickly reversed after the Fed provided the necessary nourishment to revive miners. Whereas Apple increased just 5 percent during the four weeks from August 24 through September 21, USERX and UNWPX climbed 15.7 percent and 16.4 percent, respectively, during the same timeframe.
We're pleased to see gold stocks getting the respect and attention they have lacked over the past year. I've discussed numerous times how the price of the yellow metal has held up relative to gold miners, which have been dying on the vine.
In my opinion, this is only one of the factors which makes gold miners a greater opportunity for investors today. I talked about this phenomenon on Canada's Business News Network, as well as a few specific companies I believe are worthy of a closer look.
For long-term investors, there should always be a place for a growing tech company like Apple in your portfolio. However, wise investors recognize that the potentially better opportunities offering significant growth and value wouldn't always win the popularity contest.
Watch the discussion on BNN now.
Read the Financial Advisor article.
Frank Holmes
U.S. Global Investors
