Are You Extra Bullish on Royalties?


Today’s chart makes the case for royalties.

If you’re a longtime DailyWealth reader, you’ve probably read about the precious metal “royalty model” many times. While companies that employ this model are often lumped in with conventional gold and silver stocks, they are different from your average miner… and that’s a good thing.

#-ad_banner-#Royalty earners, like our favorites Royal Gold and Silver Wheaton, don’t mine any gold or silver. Instead, they finance lots of early stage mining projects. If things work out, they earn royalties on a mine’s future production. This model offers higher profit margins and more diversification than a conventional miner focused on one or two big strikes.

As you can see from our chart below, this model has been beating conventional gold stocks. Our chart plots the performance of Silver Wheaton (black line, up 96%), Royal Gold (green line, up 46%), and the big gold stock fund, GDX (blue line, up 12%), over the past two years. Bottom line: If you’re bullish on gold and silver, you should be extra bullish on royalties.