Safest, Smartest Way to Own Gold Consider Royalty Trusts

Joseph L. Shaefer submits: There is an invigorating debate on SA between those who believe the safest and smartest way to own gold is via physical ownership of the physical metal and those who believe the gold miners, with their greater leverage but also the greater possibility of increasing labor, materiel and environmental costs, are the smarter way to go. Of course, there are ETFs and mutual funds that cater to each school of thought, as well. But I believe there is a “third rail” here, and I find it more electrifying than either of the other two paths. This would be the “royalty trusts” or “royalty-override” firms in the gold and precious metals arena. I believe these firms offer a lower risk of exploration and production, a lesser — virtually nonexistent — liability exposure, less environmental exposure, and a way to enjoy the leverage of the miners without the headaches of operating cost and labor cost increases.