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Gabelli Funds: GGN

May 24, 2011 Company Profiles 5 Comments

With the gold and silver markets working through a correction, it’s time to take a look at Gabelli Funds: GGN.  Those of you that follow me know that it was time to take profits a couple of weeks ago as the precious metals markets started this correction.  Those of you that sold a third, or more, of your positions are now sitting on a lot of cash and waiting for the right moment to get back in before the next leg up in this gold bull begins.  The question that we have to answer now is what do we do with the cash while we are waiting to get back into the market.  The answer is Gabelli Funds: GGN.

GGN offers the investor the opportunity for making a handsome dividend at a time when money market funds are paying next to nothing, while still keeping us exposed to the two hottest sectors in the markets these days, namely, gold and energy.   GGN is such a good play that I would list it as a “core” holding that should be in every one’s portfolio.

The recent correction has presented us with a great opportunity to get into GGN at a lower price.  Silver has corrected from $49.75 to the $35 range after an 8 month run up from $19 to near $50. That’s  150% gain in silver in just eight  months.   Gold in the same time frame did not have the same percentage run up, nor did it have any where as large a correction.

goldx 5 24 11 Gabelli Funds: GGN

Silver had a wild ride and is just now settling into a new consolidation trading range where it will base before its next move.

silvr 5 24 11 Gabelli Funds: GGN

These charts tell the tale of this latest correction in the precious metals market.  If we get basing here, they will set the stage for a major move up in both as we move through this summer.  That is my thinking as to what is happening.  We should have seen the bottom in the current correction.  We will base at these levels for a while and then it will be off to the races in the fall with a top in gold coming in between $1,630 and $1,650.  At that time it will once again be right to take chips off the table and book profits.  On the downside, $1,440 offers good support, but I don’t think that we are going there at this time.  When these number arrive for gold, silver will be trading back at $50 per ounce. In the meantime I will be parking some cash in GGN!

Gabelli Global Gold, Natural Resources & Income Trust

Mario Gabelli1 Gabelli Funds: GGN

Mario Gabelli

The “Objective” section on the fund’s website clearly lays out where this fund is going and why.  Be sure to check out their website www.gabelli.com before making any decisions.

The Gabelli Global Gold, Natural Resources & Income Trust is a non-diversified, closed-end management investment company that seeks to provide a high level of current income. The Fund’s secondary investment objective is to seek capital appreciation consistent with the Fund’s strategy and its primary objective.

Under normal market conditions, the Fund will attempt to achieve its objectives by investing at least 80% of its assets in equity securities of companies principally engaged in the gold industry and the natural resources industries. The Fund will invest at least 25% of its assets in the equity securities of companies principally engaged in the exploration, mining, fabrication, processing, distribution or trading of gold or the financing, managing, controlling or operating of companies engaged in “gold-related” activities. In addition, the Fund will invest at least 25% of its assets in the equity securities of companies principally engaged in the exploration, production or distribution of natural resources, such as gas, oil, paper, food and agriculture, forestry products, metals and minerals as well as related transportation companies and equipment manufacturers.

As I mentioned earlier, this fund offers participation in the gold and energy sectors and it pays a handsome dividend.  The fund is currently paying 9.39% MONTHLY!  So as to dispel any confusion, the rate of return is based on a 9.39% annual return, but it is paid monthly.  Try getting that rate in this day and age with anything that is nearly as safe.

ggn 5 24 11 Gabelli Funds: GGN

A Great Opportunity To Get In!

GGN offers a great dividend and because of the current correction, it is also offering a great opportunity to get in a a reduced price.  GGN has a $2, or more, upside potential at the current price.  This is about as close as you can get to a “no brainer”.  You get a great monthly dividend and there is still room for considerable upside appreciation as the precious metals move up during the fall.

Holdings

We live in times where exposure to precious metals and energy stocks are a must if you want to stay ahead of the currency devaluation that is occurring  in the U.S.  GGN offers the added bonus of being exposed to quality companies in both fields.  The top ten holdings in the fund are:

Agnico-Eagle Mines Ltd.
Randgold Resources Ltd.
Newmont Mining Corp.
Gold Fields Ltd.
Barrick Gold Corp.
Anglogold Ashanti Ltd.
Halliburton Co.
Kinross Gold Corp.
Suncor Energy Inc.
Newcrest Mining Ltd.

If you need to park your cash, GGN is the place to do it.  You bring in monthly income and you are exposed to quality companies in the gold and energy sectors.

As is always the case, do your own due diligence before investing in any stock or mutual fund.  I am not a financial adviser, just an individual investor just like you.  I own shares of GGN and I plan on purchasing more.  I am just telling you what has served me well with my own investments.  Your risk tolerances may not be the same as mine, so you must do your own homework before investing.  With that being said, if you need to park some cash, the answer just might be  Gabelli Funds: GGN.

Till next time, good luck and good trading!



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Currently there are "5 comments" on this Article:

  1. monthly dividends companies says:

    Get a complete list of monthly dividend stocks.

  2. Lawrence Follmer says:

    Have owned GGN for some time now. Tell me your thoughts today. Have I made a bad investment? Why are you down so much when Gold is not? Too much cream coming off the top before it gets to investors?

  3. goldbug says:

    Lawrence:

    Don’t worry about the temporary swings in the price of GGN. Gold is going much higher and soon. The price of gold is being manipulated by large holders that are currently short gold. Once the spot price takes off as inflation grows, they will no longer be able to hold gold down. You should be using these sell offs to buy more GGN and be content that you are getting paid handsomely every month as you wait for the market sentiment to change.

  4. Elliott says:

    With the portfolio shown above how does GGN generate so much income?

  5. goldbug says:

    Elliott:

    GAMCO Global Gold Natural Resources (NYSE:GGN), has been consistently paying between 9% and 10% for quite some time. It is important to note that the percentage is an annual percentage that is paid in monthly increments.

    GGN seeks high current income with capital appreciation through investment in quality equity securities that pay dividends and have potential for capital appreciation. The kicker in the equation is their strategy of using an aggressive options package which currently produces a 9.25% leverage to generate this handsome payout.

    There is no better company to own during these volatile days of government run a muck!

    Goldbug

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