Do not speculate your all hard-earned money in the junior mining stocks. They are no different from buying lottery tickets or gambling in Las Vegas/Casino Rama.alex52 said:
If you insist to speculate, refraining yourself from "investing" no more than 20% of your money. Any monsterous capital gains realized are simply bonus.
As far as gold investments are concern, barring from buying and storing gold bars (expensive as you need to keep on paying storage fees, plus not enough liquidity), the best investment in gold or silver will be ETFs, such as GLD and SLV in the US or IGT at ishares Canada (CAD version of IAU, the distance second competitor to GLD).
Unlike ABX or XGD of the world, buying those ETFs do not take the execution risks of the gold companies or their corresponding basket of index. You get one-tenth of the gold or silver bars stored in the vault by if I remember corrently at JP Morgan Chase. Moreover unlike US investors, where these products are considered collectables, CAD investors reap ordinary capital gain tax in the non-registered accounts just like stocks.
The risks or downside could be there's a chance this could turn out to be a "Madoff", i.e. no gold or silver bars stored in the first place and you need USD to purchase. Plus, correct me if I am wrong but you could not invest GLD or IGT or SLV in registered accounts like RRSP or TFSA as they are essentially collectables.
One could also buy other gold futures ETF such as DGL but you have additional risk when it comes to futures. Finally, no matter how pessimistic you think the economy is in, do not invest more than 10% of your portofolio in precious metals.
