Best ETF for 2012: Global X Silver Miners


COLONEL SIXX: YES, I HAVE HEARD “GET THE PHYSICAL SILVER”, “DON’T OWN PAPER” AD NASEUM.

WOULD YOU RATHER RENT THE WHORE,  OR OWN THE BROTHEL?

BELIEVE IT OR NOT, SILVER COMES OUT OF THE GROUND.

NOT OFF OF PEAR TREES,  NOT ON THE YELLOW BRICK ROAD,

NOT UNDER THE SKIRT OF LITTLE RED RIDING HOOD.

IT COMES FROM THE EARTH. DIRT.  DIGGING HOLES.

Although personally I am quite content with existing explosives, I feel we must not stand in the path of improvement.
Winston Churchill

 

This article is part of our Best ETFs for 2012 series, in which we’re seeking out the top-performing ETFs for the coming year.

By Christopher Barker | More Articles
December 5, 2011

It’s time to face the music, Fools. The forces that have propelled gold and silver prices higher over the past decade continue to gather steam.

The United States kicked the can down the road by attempting to bury toxic debts beneath mounds of new debt, and now here we stand with a bloated Federal Reserve and a national debt that has already exploded from $5.6 trillion to more than $15 trillion here in this very young century of ours. Europe is frantically recruiting boots from around the world to help it kick its own can of debt contagion back into the so-called “periphery” nations, though it’s anyone’s guess where that can will land next. Like a strand of trans-Atlantic telephone cable, the insidious nature of counterparty risk may yet connect Europe’s can to the one that remains airborne over U.S. soil.

During times like these, I believe Fools can ill afford to turn a blind eye to the likelihood that gold and silver will continue proving their mettle as reliable safe havens while cans of debt distress are predictably kicked to and fro. As I prepare to navigate my own way through 2012 as an investor, I would not dream of stepping one toe into the new year without my gold and silver exposure firmly intact, and I remind my fellow Fools to view the recent pullback — particularly among the glaringly undervalued miners of these metals — as a timely opportunity to initiate or build such exposure. Because I believe silver is poised to deliver a superior percentage increase to even that of gold going forward, I hold a particularly bullish outlook for the stocks of quality silver miners.

A silver bullet for silver exposure
Although I have personally constructed my own silver exposure through a basket of individual stocks, I noted after the launch of the Global X Silver Miners ETF (NYSE: SIL  ) last year that “I’ve gained little advantage over the late-coming Fool who grabs some shares of this top-notch ETF.” In order to convey the conviction behind my positive outlook for the vehicle’s long-term performance, I issued a bold prediction that my bullish CAPScall on the ETF will outperform the S&P 500 (INDEX: ^GSPC  ) by at least 200% within a five-year timeframe. Undeterred by the ETF’s lackluster performance during 2011, I reiterated my prediction over the summer, and I am similarly compelled to remind Fools today that the Global X Silver Miners ETF is favorably positioned to deliver outstanding performance during 2012 and beyond.

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