#2 – Precious Metals & Mining (VGPMX)
| A bull run in metals can make a fund like Precious Metals & Mining (VGPMX) look very attractive. But when the going gets rough, investors should watch out below.
The fund’s maximum cumulative loss ran at nearly 68.9% in 2008, and it has a long way to go to recover. Of course, I have great respect for Manager Graham French, as he takes a long, diversified view, and he knows his stuff. But as mining companies continue to merge without regard to the best interest of shareholders, diversification is increasingly difficult. Considering the huge risks associated with this sector, this fund is only for speculators, not investors. And even speculators shouldn’t allocate more than 5% of their portfolio to it. |
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