Value in volatility

Market peaks and troughs usually come with a lot of volatility, and a market top usually signals just as we all start to expect new highs happening every day.

Outside of the stock market, the broader economy remains in a precarious place, reeling from a year of uncertainty and significantly less economic activity. This leaves a seasoned investor wondering what is really going on with these markets and which way will commodity prices go.

By surrounding ourselves with the best brains and clearest thinkers, who themselves have seen it all before, we can benefit from an opportunity to invest when true value comes along. But cracking the code to investing and being a consistently profitable trader, comes with its own challenges, as keeping your wealth is as hard as making it. Whether it be through taxation or, inflation our purchasing power is being diminished daily and the longer we hold cash, the worse it becomes. 

A store of value

One way to benefit from the recent uptick in market volatility and the rise of precious metal prices is to place a portion of your portfolio in a store of wealth like physical silver and gold. In doing so you hedge a portion of your money against inflation, and you have greater upside to future appreciation in metal prices.

Higher commodity prices will inevitably lead to a ramp-up in mining production as producers try to meet the demand for precious metals such as gold and silver. Bringing on new mines and financing prospective explorations can be a major CAPEX hurdle for traditional mining companies, but there is a competitive space now for mining royalty and streaming companies, who look to benefit from the current commodity boom.

Additionally, the Gold/Silver price ratio looks to continue heading lower as the silver price rise outpaces that of gold. If you try to buy retail silver coins and bars, you’ll find that the delivery dates are growing along with the associated premiums. The premiums on retail silver are rising because the dealers have less inventory due to increase demand.

You may be thinking of investing in the miners directly, but you should consider data that shows royalty companies have consistently outperformed other mining equities over the last 10 years and that they often trade at a premium of 15-30x EBIDTA and 1.25-2.0x NAV. Royalty companies generate value for their shareholders at all stages of the commodity cycle, by securing fixed margins and mitigating downside risks associated with financing project developments.

The play 

One company that prides itself on being able to spot value is Vox Royalty Corp. (VOX.TSXV). Their management team is made up of industry experts, with a combined 40 years of knowledge focused on what makes an asset both one of quality but also one of true value. Management includes geologists and mining engineers. The company has a database of 7000 royalties and their intellectual property affords Vox the ability to evaluate and execute on more opportunities than their competitors, adding significant value for their shareholders far into the future.

This exciting royalty company is expanding and is one of the fastest-growing companies in this niche sector, with its portfolio of over 45 royalties and streams spanning mostly low-risk jurisdictions. The company began publicly trading in May 2020 and is listed on the TSX Venture Exchange and over the last 3 months has seen a 33% increase in the share price. 

If you are looking to invest in precious metals in a manner that reduces certain risks, consider learning more Vox Royalty Corp.