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Is there gold in your 401(k)?
It’s not just gold bugs getting hit by the yellow metal’s sharp decline.
Stocks of gold mining companies received a lot of attention from investors over the past several years, with high gold prices flowing directly to their bottom lines. Of course, with gold now near two-year lows — the metal posted its largest single-day drop in 30 years on Monday before recovering somewhat today — these stocks have more recently been taking it on the chin.
The $5.7 billion Market Vectors Gold Miner’s ETF (US:GDX) declined 9.9% Monday and is down 38% for the year. Of course, investors that dabble in such narrowly focused funds know (we hope) they are in for big price swings.
But some mutual funds with much broader investment mandates are also big holders of gold-mining stocks. These have been stung too, with tumbling gold prices in some cases appearing to offset much or all of the gains investors might have realized from the stock market’s roughly 10% rally this year. “It cost us,” says Bill Nasgovitz, portfolio manager of the $1.2 billion Heartland Value fund, whose fund owns producers like Golden Star Resources and AuRico Gold. He’s sticking with the sector. “It’s a volatile world,” he says.
Read More: http://www.stockgoldmarket.com/is-there-gold-in-your-401k
