What to do with VGPMX (Vanguard Precious Metals and Mining)?

Have a question about your personal investments? No matter how simple or complex, you can ask it here.
User avatar
hollowcave2
Posts: 1790
Joined: Thu Mar 01, 2007 3:22 pm
Location: Sacramento, CA

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by hollowcave2 » Thu Dec 17, 2015 7:54 pm

Very good assessment in the post above.

Looks like price for VGPMX will drop more from here. I expect a new all time low soon. They may have to do a reverse split on the fund.

It could be a good time to buy if you have staying power and the allocation represents a small portion of your overall portfolio. This is the problem with sector funds. Tough volatility sometimes.

I like mining stocks, but even I am a bit skiddish here. VGPMX is still a good fund, but assess whether you really need it for your investment goals. It could take a while for a comeback.

It may be better to wait and watch for a reversal in trend. I don't really mean short term timing the market, but I'd like to see some strength before buying into it. Instead of trying to catch the low, you could wait to see when it starts heading back up again and actually buy higher.

OR, dare I say it, you can skip the analysis and start investing today.............with Dollar Cost Averaging as the strategy over the next 12-18 months.

User avatar
ruralavalon
Posts: 17369
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: What to do with VGPMX?

Post by ruralavalon » Thu Dec 17, 2015 8:13 pm

FlyingMoose wrote: I wouldn't mind so much, but it is no longer what it once was. It used to be called an index, whether it was or not. It's apparently now only half precious metal and the other half is commodities. It's also not very evenly distributed and is also actively managed. If it was still an actual index, I wouldn't mind as much, even if it had lost more money. I feel that it might not capture the gains in precious metals, if the economy and other commodities are down but gold is up.
I owned Vanguard Precious Metals and Mining Fund for many years starting in 2005. It was not an index fund, it's always been a managed fund. It's almost entirely stocks of companies in the mining industry, not necessarily mining companies, certainly not just miners of precious metals. It held almost no physical precious metals. It has always been extremely volatile.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Dec 17, 2015 11:38 pm

btenny wrote:Well here is what I know today. I live in Arizona and Lake Tahoe part time. Both areas have major mining companies and major mining operations. Right now the area mining companies in both places are cutting back and laying off people. Lots of people. Mining is very much a boom and bust business. Companies go bankrupt and have big issues and sell out to other companies.

I have lived here for 60+ years. I have seen many boom and bust cycles. Each time the price of gold and copper goes up a lot the companies ramp up production and open mines and hire tons of people. Then they work like mad and sell tons of stuff and stock pile tons of ore so when the prices drop they can shut down. Well the prices have dropped and the companies are shutting down. These cycles usually last 3-5 years or longer before the mines start back up producing at low levels. Right now we are at the front end of a bust. So think 3-5 years before things rebound.

http://www.riotinto.com/copperandcoal/r ... -4682.aspx

http://www.copperarea.com/pages/asarco- ... g-to-area/

http://www.reviewjournal.com/business/g ... 1988-level
The question is how much of this information that you are aware of is already discounted into the current value of the fund's share price ?
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

dziuniek
Posts: 613
Joined: Mon Jul 23, 2012 2:54 pm
Location: Corrupticut

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by dziuniek » Fri Dec 18, 2015 8:05 am

There's been quite a few threads about this fund recently. Seems like everyone wants to sell, even bogleheads who claim to buy & hold!

I wouldn't be surprised if it was a buy signal, haha.

jdb
Posts: 1627
Joined: Wed Dec 05, 2012 8:21 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by jdb » Fri Dec 18, 2015 7:31 pm

This fund will be a good investment when moose fly. Get rid of it and stop stressing over investments.

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Fri Dec 18, 2015 7:38 pm

jdb wrote:This fund will be a good investment when moose fly. Get rid of it and stop stressing over investments.
Image
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

Jagman
Posts: 118
Joined: Sat Jul 19, 2008 4:38 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mini

Post by Jagman » Tue Jan 12, 2016 8:37 pm

Jagman wrote:
nedsaid wrote:Being value oriented and a bit contrarian in my thinking, I keep wondering whether or not I should buy a precious metals fund. It has got to be the most hated asset class out there. Something in me thinks this is worth checking out. This is a hated area of the market and prices are way down. Hmmm. Not only that, as I get older I am thinking that maybe I need some portfolio insurance.

Not saying I will do it, but I am thinking about it.
May 16, 2008: $39.75/share
Jan 8, 2015: $9.45/share
Jul 20, 2015: $7.32/share (6.87% drop today)

How low will it go?
Jan 12, 2016: $5.99/share

User avatar
saltycaper
Posts: 2650
Joined: Thu Apr 24, 2014 8:47 pm
Location: The Tower

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by saltycaper » Wed Jan 13, 2016 1:37 am

I enjoy taking contrarian positions, but this one, boy, I can't even fathom trying to catch it on the way down. Looks ripe for the classic trap, "The price is so low compared to where it previously traded that it must be a good buy." I wouldn't count on price reversion when it comes to narrowly focused sector funds that lack diversification.
Quod vitae sectabor iter?

letsgobobby
Posts: 12073
Joined: Fri Sep 18, 2009 1:10 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by letsgobobby » Wed Jan 13, 2016 1:51 am

I bought this in May 2001 and several times later, and sold 80% in July 2008 at 33.xx per share. I sold the last 20% later that fall (at lower prices). It had already, back then, ceased to be a pure-ish gold fund. So I don't think it should be a surprise that it is still a commodities fund.

I would sell, unless you want pure commodities exposure, in which case there may be a better, purer, less expensive, more indexed way to play.

Valuethinker
Posts: 39414
Joined: Fri May 11, 2007 11:07 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Valuethinker » Wed Jan 13, 2016 5:35 am

saltycaper wrote:I enjoy taking contrarian positions, but this one, boy, I can't even fathom trying to catch it on the way down. Looks ripe for the classic trap, "The price is so low compared to where it previously traded that it must be a good buy." I wouldn't count on price reversion when it comes to narrowly focused sector funds that lack diversification.
The problem is the mining stocks are highly levered.

See the coal industry right now. They have debts to service, as well as their operating costs to fund. So the value of the equity drops to near zero, because it's likely the debt holders will own the firm.

The other factor is high operational gearing. Say the breakeven price of gold for them is above $1200/ oz. Then as the price drops to $1150 (from say 1350) they are losing money, whereas someone who owns gold has only lost 20% of their value.

The good news is that if/ when PM prices go up, the upside is correspondingly greater.

The analogy in the oil sector would be the Canadian oil sands cos. Right now, prices are below breakeven (probably even below *cash* breakeven, for some producers). But if and when prices go up again, the impact on their profitability will also be disproportionate on the upside.

From the shareholder perspective the company has to be financially strong enough to survive that downturn-- for however long it lasts.

ajacobs6
Posts: 266
Joined: Mon May 18, 2015 4:42 pm

Re: What to do with VGPMX?

Post by ajacobs6 » Wed Jan 13, 2016 7:40 am

FlyingMoose wrote:
FuzzyButtons wrote:
FlyingMoose wrote:If I sell VGPMX at a loss, I will have taken the risk without getting the reward.
The long term return of gold tends to be zero, when adjusted for inflation.
That's why I invested in a fund of miners, which pay dividends, instead of physical gold or a gold ETF.
Which fund is that?

User avatar
ruralavalon
Posts: 17369
Joined: Sat Feb 02, 2008 10:29 am
Location: Illinois

Re: What to do with VGPMX?

Post by ruralavalon » Wed Jan 13, 2016 12:54 pm

ajacobs6 wrote:
FlyingMoose wrote:
FuzzyButtons wrote:
FlyingMoose wrote:If I sell VGPMX at a loss, I will have taken the risk without getting the reward.
The long term return of gold tends to be zero, when adjusted for inflation.
That's why I invested in a fund of miners, which pay dividends, instead of physical gold or a gold ETF.
Which fund is that?
Vanguard Precious Metals and Mining (VGPMX) ER 0.29%. It invested in stocks of companies in the mining industry, it holds almost no precious metals.
"Everything should be as simple as it is, but not simpler." - Albert Einstein | Wiki article link:Getting Started

ajacobs6
Posts: 266
Joined: Mon May 18, 2015 4:42 pm

Re: What to do with VGPMX?

Post by ajacobs6 » Wed Jan 13, 2016 2:18 pm

ruralavalon wrote:
ajacobs6 wrote:
FlyingMoose wrote:
FuzzyButtons wrote:
FlyingMoose wrote:If I sell VGPMX at a loss, I will have taken the risk without getting the reward.
The long term return of gold tends to be zero, when adjusted for inflation.
That's why I invested in a fund of miners, which pay dividends, instead of physical gold or a gold ETF.
Which fund is that?
Vanguard Precious Metals and Mining (VGPMX) ER 0.29%. It invested in stocks of companies in the mining industry, it holds almost no precious metals.
Are there any other acceptable options out there? I've found an ETF called PICK. The only thing is that I don't like the high turnover of the Vanguard fund. That can be expensive for investors.

sk55
Posts: 30
Joined: Sun Jan 10, 2016 11:20 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by sk55 » Wed Jan 13, 2016 2:26 pm

FlyingMoose wrote:A couple of years ago, when setting up my portfolio, I decided to do the 5% Wild Money thing, and put 5% into VGPMX
(Vanguard Precious Metals and Mining). Looking at the history of the fund, it seemed to be a leveraged bet on gold, and I figured it would act as an insurance policy for my portfolio for things like what happened between 2006 and now.

I have rebalanced into it, so now, while it is still 5% of my portfolio, it has cost me 6% of the present value (which is much larger now than it had been). I've lost about 1/2 of my initial investment in it, and about 1/3 of the total I put in including rebalancing.

I wouldn't mind so much, but it is no longer what it once was. It used to be called an index, whether it was or not. It's apparently now only half precious metal and the other half is commodities. It's also not very evenly distributed and is also actively managed. If it was still an actual index, I wouldn't mind as much, even if it had lost more money. I feel that it might not capture the gains in precious metals, if the economy and other commodities are down but gold is up.

However, I'm conflicted about dumping it, because I really don't like the idea of locking in my losses. But I'm not sure if it will revert to its "mean" because the composition is different compared to the past. Also, I put it in my Roth, because I wanted to put the biggest gainers there, which makes it hurt even more.

I guess if I really wanted to stick to my guns, I could find another fund which is an actual index (to act as a leveraged gold bet), especially since most of them are down more than VGPMX at the present time. But I don't know how hard it would be to buy a non-Vanguard fund in my Vanguard account.

After a recent serious illness which was exacerbated, if not caused, by stress, I just simplified the rest of my portfolio because of the stress it was causing me (got rid of Small Value and International Small and put them into Total US and Total Int'l). It wasn't difficult because, even though they were up and down, they're currently about where I bought them, so I could make the change and be in the same position as if it'd never happened. This will allow me to be more tax-efficient (because one of my accounts has more choices in this area) and make rebalancing easier (which was difficult because of all the little pieces trying, and sometimes failing, to be tax efficient across 6 accounts).

If I sell VGPMX at a loss, I will have taken the risk without getting the reward. So I guess my options are:

1. Keep going as I am, rebalancing into it and hoping it pays off big some day.
2. Keep it but don't rebalance (and maybe take this year's rebalance amount back out since it's still about the same price), and hope it pays off big some day.
3. DCA out of it over a year or so, and split the money among my 3-fund portfolio (40% US, 40% Int'l, 20% Bond)
4. Try to market-time a good time to dump it and split the money among my 3-fund portfolio.


I would dump it. IMO gold is dead for 10 years. I had actually
Gold coin as well as GLD
Made some money I am totally out except for some silver coins for sentimental reasons.

Gold had its run. Take the money into a large cap stock fund.

That's what I did and I been happy.

Dulocracy
Posts: 2303
Joined: Wed Feb 27, 2013 1:03 pm
Location: Atlanta, GA

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Dulocracy » Wed Jan 13, 2016 5:55 pm

sk55 wrote:


I would dump it. IMO gold is dead for 10 years. I had actually
Gold coin as well as GLD
Made some money I am totally out except for some silver coins for sentimental reasons.

Gold had its run. Take the money into a large cap stock fund.

That's what I did and I been happy.
NONONO! First, if you dump a fund, you will lock in losses. That would be locking in a LOT of losses for that fund. Also, that fund is not gold. That fund is mining. There is a difference between funds of precious metals and funds invested in companies in charge of digging those metals out of the ground. You have copper mines and silver mines and cobalt mines and... you get the picture. When the world economies pick back up again and start using more resources, you will see a bump in that fund.

The biggest question is not whether or not to sell, but whether or not to keep investing according to your asset allocation or to keep your current funds and invest in some new asset allocation now that some of your funds are not doing well. Honestly, I would keep investing while those funds are cheap, even though I personally would not have chosen the fund. Remember: more important than picking the perfect asset allocation is to stick to the allocation that you pick.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

sk55
Posts: 30
Joined: Sun Jan 10, 2016 11:20 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by sk55 » Wed Jan 13, 2016 8:14 pm

Dulocracy wrote:
sk55 wrote:


I would dump it. IMO gold is dead for 10 years. I had actually
Gold coin as well as GLD
Made some money I am totally out except for some silver coins for sentimental reasons.

Gold had its run. Take the money into a large cap stock fund.

That's what I did and I been happy.
NONONO! First, if you dump a fund, you will lock in losses. That would be locking in a LOT of losses for that fund. Also, that fund is not gold. That fund is mining. There is a difference between funds of precious metals and funds invested in companies in charge of digging those metals out of the ground. You have copper mines and silver mines and cobalt mines and... you get the picture. When the world economies pick back up again and start using more resources, you will see a bump in that fund.

The biggest question is not whether or not to sell, but whether or not to keep investing according to your asset allocation or to keep your current funds and invest in some new asset allocation now that some of your funds are not doing well. Honestly, I would keep investing while those funds are cheap, even though I personally would not have chosen the fund. Remember: more important than picking the perfect asset allocation is to stick to the allocation that you pick.

Yes good point. For me I am just not into commodity period
Mining gold oil etc. which I was luck to get out.
I am rather be in stock fund and treasuries bonds.

Correct me if my wrong but I though John boggle mentions
To be in stock bond fund. Don't remember anything about
Commodities.

User avatar
David Jay
Posts: 7527
Joined: Mon Mar 30, 2015 5:54 am
Location: Michigan

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by David Jay » Wed Jan 13, 2016 10:30 pm

This thread got me exploring. Another reason for the low valuation is that the fund is 93.5% foreign. The U.S. Dollar is crazy-strong right now. So this fund has the potential for a big gain just on FOREX. I am intrigued at these prices...

I am reading Bernstein's "Four Pillars" and he highlights gold mining stocks as a backstop when "everything else" goes off the rails.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

Erwin
Posts: 1929
Joined: Fri Apr 27, 2007 11:16 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Erwin » Wed Jan 13, 2016 11:37 pm

David Jay wrote:This thread got me exploring. Another reason for the low valuation is that the fund is 93.5% foreign. The U.S. Dollar is crazy-strong right now. So this fund has the potential for a big gain just on FOREX. I am intrigued at these prices...

I am reading Bernstein's "Four Pillars" and he highlights gold mining stocks as a backstop when "everything else" goes off the rails.

Not only that but he was very positive on this asset class a few weeks ago in a M* interview. I wonder what he thinks now.
Erwin

Valuethinker
Posts: 39414
Joined: Fri May 11, 2007 11:07 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Valuethinker » Thu Jan 14, 2016 4:05 am

David Jay wrote:This thread got me exploring. Another reason for the low valuation is that the fund is 93.5% foreign. The U.S. Dollar is crazy-strong right now. So this fund has the potential for a big gain just on FOREX. I am intrigued at these prices...

I am reading Bernstein's "Four Pillars" and he highlights gold mining stocks as a backstop when "everything else" goes off the rails.
Gold is however priced in dollars. So these companies have costs in non USD but revenues in USD. They may hedge their own currency exposure.

A rise in the dollar increases their effective revenues, and therefore their profits (if they don't hedge).

A rise in overseas currencies (AUD, CAD, South African Rand, Ghanain currency) hurts them on the profits size.

I suspect it is something of a wash.

One of the reasons commodity prices have been falling is the strength of the dollar. Consumers in other countries are facing higher prices and so consuming less.

User avatar
White Coat Investor
Posts: 14417
Joined: Fri Mar 02, 2007 9:11 pm
Location: Greatest Snow On Earth

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by White Coat Investor » Thu Jan 14, 2016 1:13 pm

Sold out of USAA Precious Metals yesterday and bought back into Vanguard Precious Metals today for a round trip TLH over a little over 2 months. We'll see where it goes from here!

(FYI this is a small part of a small part of my net worth, and not actually retirement money which I do not invest in precious metals.)
1) Invest you must 2) Time is your friend 3) Impulse is your enemy | 4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course

User avatar
nedsaid
Posts: 13025
Joined: Fri Nov 23, 2012 12:33 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mini

Post by nedsaid » Thu Jan 14, 2016 10:57 pm

Jagman wrote:
Jagman wrote:
nedsaid wrote:Being value oriented and a bit contrarian in my thinking, I keep wondering whether or not I should buy a precious metals fund. It has got to be the most hated asset class out there. Something in me thinks this is worth checking out. This is a hated area of the market and prices are way down. Hmmm. Not only that, as I get older I am thinking that maybe I need some portfolio insurance.

Not saying I will do it, but I am thinking about it.
May 16, 2008: $39.75/share
Jan 8, 2015: $9.45/share
Jul 20, 2015: $7.32/share (6.87% drop today)

How low will it go?
Jan 12, 2016: $5.99/share
I am reminded of the Jack Benny skit where he was held up with a gun. "Your money or your life," said the robber. "Your money or your life," repeated the robber. "I'm thinking, I'm thinking," replied Benny.

In the case of precious metals funds, I am still thinking. The thing is that I believe that the price of the precious metals themselves have further to fall, I don't see how this bodes well for mining companies. A big reason for this is the slowdown in China.
A fool and his money are good for business.

Dulocracy
Posts: 2303
Joined: Wed Feb 27, 2013 1:03 pm
Location: Atlanta, GA

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Dulocracy » Fri Jan 15, 2016 9:50 am

sk55 wrote:

Yes good point. For me I am just not into commodity period
Mining gold oil etc. which I was luck to get out.
I am rather be in stock fund and treasuries bonds.

Correct me if my wrong but I though John boggle mentions
To be in stock bond fund. Don't remember anything about
Commodities.
Correct, but this is not a Commodities fund. It is a stock fund that invests in companies that produce commodities. There are lots of interesting theories about sector funds, and I personally would not invest in them. However, they are companies with stock, and if invested, I would not sell and lock in such losses. I would sell once they had recovered those losses, however.
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

sk55
Posts: 30
Joined: Sun Jan 10, 2016 11:20 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by sk55 » Fri Jan 15, 2016 12:24 pm

Dulocracy wrote:
sk55 wrote:

Yes good point. For me I am just not into commodity period
Mining gold oil etc. which I was luck to get out.
I am rather be in stock fund and treasuries bonds.

Correct me if my wrong but I though John boggle mentions
To be in stock bond fund. Don't remember anything about
Commodities.
Correct, but this is not a Commodities fund. It is a stock fund that invests in companies that produce commodities. There are lots of interesting theories about sector funds, and I personally would not invest in them. However, they are companies with stock, and if invested, I would not sell and lock in such losses. I would sell once they had recovered those losses, however.
usually mining stocks values are heavily tied to the commodity prices they are related too. for example gold down 30%+ in 5 years... NEM is down like 60%+...
i just don't think people realize how volatile these things are...

The only thing commodity (if i was interested) would be oil, and i would be buying like Exxon getting a dividend.. even that pretty volatile recently.

Dulocracy
Posts: 2303
Joined: Wed Feb 27, 2013 1:03 pm
Location: Atlanta, GA

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Dulocracy » Fri Jan 15, 2016 1:39 pm

sk55 wrote:
Dulocracy wrote:
sk55 wrote:

Yes good point. For me I am just not into commodity period
Mining gold oil etc. which I was luck to get out.
I am rather be in stock fund and treasuries bonds.

Correct me if my wrong but I though John boggle mentions
To be in stock bond fund. Don't remember anything about
Commodities.
Correct, but this is not a Commodities fund. It is a stock fund that invests in companies that produce commodities. There are lots of interesting theories about sector funds, and I personally would not invest in them. However, they are companies with stock, and if invested, I would not sell and lock in such losses. I would sell once they had recovered those losses, however.
usually mining stocks values are heavily tied to the commodity prices they are related too. for example gold down 30%+ in 5 years... NEM is down like 60%+...
i just don't think people realize how volatile these things are...

The only thing commodity (if i was interested) would be oil, and i would be buying like Exxon getting a dividend.. even that pretty volatile recently.

Very true, but as they are companies that will likely rebound, I still think it is best for OP to stay in until they do and then sell. (Note that, as you state, these companies are volatile. That means more extreme ups and downs. Staying the course is likely the best way not to get hosed on this one).
I'm not a financial professional. Post is info only & not legal advice. No attorney-client relationship exists with reader. Scrutinize my ideas as if you spoke with a guy at a bar. I may be wrong.

Jagman
Posts: 118
Joined: Sat Jul 19, 2008 4:38 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mini

Post by Jagman » Fri Jan 15, 2016 8:58 pm

nedsaid wrote:
Jagman wrote:
Jagman wrote:
nedsaid wrote:Being value oriented and a bit contrarian in my thinking, I keep wondering whether or not I should buy a precious metals fund. It has got to be the most hated asset class out there. Something in me thinks this is worth checking out. This is a hated area of the market and prices are way down. Hmmm. Not only that, as I get older I am thinking that maybe I need some portfolio insurance.

Not saying I will do it, but I am thinking about it.
May 16, 2008: $39.75/share
Jan 8, 2015: $9.45/share
Jul 20, 2015: $7.32/share (6.87% drop today)

How low will it go?
Jan 12, 2016: $5.99/share
I am reminded of the Jack Benny skit where he was held up with a gun. "Your money or your life," said the robber. "Your money or your life," repeated the robber. "I'm thinking, I'm thinking," replied Benny.

In the case of precious metals funds, I am still thinking. The thing is that I believe that the price of the precious metals themselves have further to fall, I don't see how this bodes well for mining companies. A big reason for this is the slowdown in China.
Blood is in the streets.

$5.73/share

joer1212
Posts: 464
Joined: Sun Feb 17, 2013 1:55 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by joer1212 » Wed Jan 20, 2016 2:43 pm

Slightly off topic: How can I track VGPMX (Vanguard Precious Metals and Mining Fund) in real time? Yahoo! Finance only shows its performance for the prior day, not the current one.
I've tried searching for ETF's that track the same benchmark as VGPMX, but I haven't found any. An equivalent ETF would allow me to monitor the performance of this sector in real time.

slbnoob
Posts: 456
Joined: Thu Jul 25, 2013 1:31 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by slbnoob » Wed Jan 20, 2016 2:51 pm

joer1212 wrote:I've tried searching for ETF's that track the same benchmark as VGPMX, but I haven't found any. An equivalent ETF would allow me to monitor the performance of this sector in real time.
From other posts around here, I've learned to use XME and PICK. Note that those 2 and VGPMX are not equivalent, but still broadly overlap.

lack_ey
Posts: 6701
Joined: Wed Nov 19, 2014 11:55 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by lack_ey » Wed Jan 20, 2016 2:56 pm

joer1212 wrote:Slightly off topic: How can I track VGPMX (Vanguard Precious Metals and Mining Fund) in real time? Yahoo! Finance only shows its performance for the prior day, not the current one.
I've tried searching for ETF's that track the same benchmark as VGPMX, but I haven't found any. An equivalent ETF would allow me to monitor the performance of this sector in real time.
It's an active fund (carrying a nontrivial amount of cash, no less) for which Vanguard's constructed their own spliced-together benchmark. There's not really any equivalent product. Vanguard's fund is unusual in that it covers both precious metals equity as well as other types of miners. It used to be just gold miners, I think, but its mandate got changed.

An unsatisfactory but potentially usable approximation would be to look at some kind of average of iShares MSCI Global Metals & Mining Producers (PICK) and iShares MSCI Global Gold Miners (RING):
Image

edit: I recommend RING over XME because the latter is US-only and Vanguard's fund is quite global.

joer1212
Posts: 464
Joined: Sun Feb 17, 2013 1:55 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by joer1212 » Wed Jan 20, 2016 3:13 pm

lack_ey wrote:
joer1212 wrote:Slightly off topic: How can I track VGPMX (Vanguard Precious Metals and Mining Fund) in real time? Yahoo! Finance only shows its performance for the prior day, not the current one.
I've tried searching for ETF's that track the same benchmark as VGPMX, but I haven't found any. An equivalent ETF would allow me to monitor the performance of this sector in real time.
It's an active fund (carrying a nontrivial amount of cash, no less) for which Vanguard's constructed their own spliced-together benchmark. There's not really any equivalent product. Vanguard's fund is unusual in that it covers both precious metals equity as well as other types of miners. It used to be just gold miners, I think, but its mandate got changed.

An unsatisfactory but potentially usable approximation would be to look at some kind of average of iShares MSCI Global Metals & Mining Producers (PICK) and iShares MSCI Global Gold Miners (RING):
Image

edit: I recommend RING over XME because the latter is US-only and Vanguard's fund is quite global.
Thanks for the helpful info. I'm going to use RING as a reference.

Angst
Posts: 2131
Joined: Sat Jun 09, 2007 11:31 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Angst » Wed Jan 20, 2016 3:16 pm

Right now, M* says:
PICK -3.42%
RING +2.90%

joer1212
Posts: 464
Joined: Sun Feb 17, 2013 1:55 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by joer1212 » Wed Jan 20, 2016 3:23 pm

Angst wrote:Right now, M* says:
PICK -3.42%
RING +2.90%
So, which of these two reflects today's performance of VGPMX (not that any mortal would know)?

lack_ey
Posts: 6701
Joined: Wed Nov 19, 2014 11:55 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by lack_ey » Wed Jan 20, 2016 3:35 pm

I would expect a positive return today. By "some kind of average" I don't mean to equal weight. The latest report says it's heavier in precious metals equity. A cursory glance at the top ten holdings indicates that as well.

Also, you can check recent daily correlation with other funds, which bears it out:
Image
https://www.portfoliovisualizer.com/ass ... F20%2F2015

joer1212
Posts: 464
Joined: Sun Feb 17, 2013 1:55 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by joer1212 » Wed Jan 20, 2016 3:56 pm

lack_ey wrote:I would expect a positive return today. By "some kind of average" I don't mean to equal weight. The latest report says it's heavier in precious metals equity. A cursory glance at the top ten holdings indicates that as well.

Also, you can check recent daily correlation with other funds, which bears it out:
Image
https://www.portfoliovisualizer.com/ass ... F20%2F2015
Thanks

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Jan 21, 2016 11:21 am

A friend sold out of his VGPMX allocation because it had lost a lot.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Feb 04, 2016 9:17 pm

$ 6.78 / share

Up 22.16% from its bottom Jan. 19 (5.55) according to Yahoo Finance chart.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

MGator
Posts: 24
Joined: Thu Aug 21, 2014 5:48 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by MGator » Thu Feb 04, 2016 10:50 pm

A little late to this thread but just to give some color on the fund and mining in general:

1) While in title it mentions Precious Metals and Mining, the fund is much more diverse than you would imagine at first glance - there is a good deal of exposure to not only gold/silver, but also copper, diamonds, etc, as well as smelter operations. This fund is definitely not as pure an investment in PM mining companies as others out there (granted all PM miners have some sort of by-products they mine in the day to day production of gold or silver - zinc/lead/copper/nickel/etc).

2) The fund is a Vanguard fund but is actually managed and run by M&G, a U.K. Investment firm - not Vanguard directly.

3) Mining companies have exposure to multiple jurisdictions/countries typically, and as a result have exposure to various FX regimes that can help and hurt at times based on market condition. Australia is a prime example in 2015 - the AUD crashed hard, and the price of gold in AUD terms spiked. The Aussie miners were able to generate a good deal of income in USD while paying workers in AUD and as such, had a significant FX tailwind. However, these trends can reverse and that can be painful for companies.

4) Precious metals mining companies (especially those based in Canada) have some of the worst corporate governance in the world. If you're really curious, I'd recommend looking at the compensation structure for those companies (specifically Yamana, Eldorado, Goldcorp) versus their actual performance over the past few years. Let's just say that there is no way a gold mining company's CEO should be making more than CEOs at much larger Fortune 500 companies - nor should they pay themselves bonuses on deals...deals that are part of their job description.

5) Here's the bottom line....these funds are levered to the price movements in gold/silver/et, to both the upside and downside. During the good times these funds were up 30/40/50% a year....recently, they've been down by the same amount per year. Those companies on the brink of insolvency will do the best (typically) when the price of gold/silver/etc rallies and the worst when it falls....and there are a ton on the brink at 1000-1100/oz gold. These are not for the faint of heart and if you do choose to invest in them, realize that it can be gut wrenching at times.

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Mon Feb 08, 2016 6:09 pm

7.08

All aboard the rocket ship.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Feb 11, 2016 4:28 pm

RING up ~8% today.

Will be interesting to see the VGPMX gain today as they are correlated but sometimes their daily moves are not in sync.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

best2u
Posts: 83
Joined: Tue Jul 28, 2015 12:51 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by best2u » Thu Feb 11, 2016 5:29 pm

Another investment along these lines is GDX. I have never owned it but used to watch it as an indicator of price direction when I owned VGPMX. Typically they both moved in the same direction although not by the same magnitude. Good luck with your sector tilts & investments.
“There are three kinds of men. The one that learns by reading. The few who learn by observation. The rest of them have to pee on the electric fence for themselves.” Will Rogers

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Feb 11, 2016 8:48 pm

best2u wrote:Another investment along these lines is GDX. I have never owned it but used to watch it as an indicator of price direction when I owned VGPMX. Typically they both moved in the same direction although not by the same magnitude. Good luck with your sector tilts & investments.
Thank you, I have followed GDX. Seems more volatile than VGPMX.

VGPMX up only 4.07% today.

Up 29.01% from bottom 01/19/16 (5.55)
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

Jagman
Posts: 118
Joined: Sat Jul 19, 2008 4:38 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Jagman » Sat Feb 13, 2016 7:16 pm

And suddenly, just like that, without warning, it is best performing fund in Vanguard's lineup for 2016. Up 16.19% YTD.

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Feb 18, 2016 8:28 pm

7.56

Up 36.2% from bottom on 1/19/16 of 5.55

Incredible volatility.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

User avatar
jimb_fromATL
Posts: 2278
Joined: Sun Nov 10, 2013 12:00 pm
Location: Atlanta area & Piedmont Triad NC and Interstate 85 in between.

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by jimb_fromATL » Thu Feb 18, 2016 11:28 pm

Fat-Tailed Contagion wrote:7.56

Up 36.2% from bottom on 1/19/16 of 5.55

Incredible volatility.
Y'all might find these comparisons interesting. If only we had a working crystal ball.

Image
Image

Results for lump sum and DCA periodic contributions:

geomean is the compound annual growth rate for a lump sum.
DCA rate is the APY for contributing $1000 at the beginning of each year.

VGPMX: geomean= -5.994%; $10,000 10 years = $5,390. DCA rate= -14.561%; $1000/yr 10yr = $4,651.
PRWCX: geomean= 8.543%; $10,000 10 years = $22,700. DCA rate= 10.236%; $1000/yr 10yr = $17,768.
VWINX: geomean= 6.969%; $10,000 10 years = $19,615. DCA rate= 7.138%; $1000/yr 10yr = $14,900.
VWELX: geomean= 7.267%; $10,000 10 years = $20,169. DCA rate= 7.961%; $1000/yr 10yr = $15,611.
VGSTX: geomean= 6.052%; $10,000 10 years = $17,997. DCA rate= 6.993%; $1000/yr 10yr = $14,778.
VFINX: geomean= 7.186%; $10,000 10 years = $20,016. DCA rate= 9.746%; $1000/yr 10yr = $17,279.
PRPFX: geomean= 5.145%; $10,000 10 years = $16,515. DCA rate= 2.857%; $1000/yr 10yr = $11,714.
median: geomean= 7.55%; $10,000 10 years = $20,706. DCA rate= 7.55%; $1000/yr 10yr = $15,251.
FSAGX: geomean= -4.638%; $10,000 10 years = $6,219. DCA rate= -13.518%; $1000/yr 10yr = $4,900.

jimb

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Feb 25, 2016 6:33 pm

7.65

Up 37.8% from low of 5.55 on Jan. 19, 2016.

RING is up 60.4% from its low of 5.10 on Jan. 19.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Thu Mar 03, 2016 9:31 pm

8.01

Up 44.32% from low.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Fri Mar 04, 2016 9:54 pm

8.20

Up 47.75% from Jan. 19 low.
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

User avatar
LadyGeek
Site Admin
Posts: 59558
Joined: Sat Dec 20, 2008 5:34 pm
Location: Philadelphia
Contact:

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by LadyGeek » Fri Mar 04, 2016 10:57 pm

The OP has not replied in this thread, which was started on Dec 08, 2014.

FlyingMoose - What did you do with this fund?

Fat-Tailed Contagion - Is there a reason for posting the latest price info?
Wiki To some, the glass is half full. To others, the glass is half empty. To an engineer, it's twice the size it needs to be.

michaelsieg
Posts: 583
Joined: Mon Jan 07, 2013 11:02 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by michaelsieg » Fri Mar 04, 2016 11:23 pm

Fat-Tailed Contagion - Is there a reason for posting the latest price info?
Probably because it feels good to see some gains after years of having the fund loose money - for those of us who have rebalanced into the fund as it went down over the past few years it just feels good to finally see the trend reverse.

Topic Author
FlyingMoose
Posts: 424
Joined: Wed Mar 04, 2009 10:48 pm

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by FlyingMoose » Fri Mar 04, 2016 11:44 pm

LadyGeek wrote:The OP has not replied in this thread, which was started on Dec 08, 2014.

FlyingMoose - What did you do with this fund?
I've been keeping an eye on the thread.

I sold VGPMX back in September 2015 and bought GDX (had to convert my account to a brokerage account), to get a more pure play in gold miners. It has gone up even faster than VGPMX since then. I'm still not back to my original investment but getting there.

I've decided to use 20% rebalancing bands instead of using time-based rebalancing, since it is such a volatile sector and changes direction multiple times during the year.

User avatar
Fat-Tailed Contagion
Posts: 912
Joined: Fri Mar 02, 2007 11:49 am

Re: What to do with VGPMX (Vanguard Precious Metals and Mining)?

Post by Fat-Tailed Contagion » Sat Mar 05, 2016 2:16 am

Fat-Tailed Contagion wrote:
jdb wrote:This fund will be a good investment when moose fly. Get rid of it and stop stressing over investments.
Image
Because Moose began to fly :shock: :sharebeer
“The intelligent investor is a realist who sells to optimists and buys from pessimists.” | ― Benjamin Graham, The Intelligent Investor

Post Reply