In this very uncertain market, investors are right to reconsider balancing their portfolios to match their desired level of risk. Indeed, each investor has his/her own individual risk tolerance level. Thus, as I’ve heard a number of prominent voices in the investing community say, if this recent volatility has an individual investor spooked, that could mean they’re taking too much risk.
There are many strategies investing experts have put forward as ways for investors to ultimately dial back their risk level within their portfolios. Diversification is one key factor that investors should certainly look at. Having exposure to a range of equities (and other asset classes) can help reduce risk significantly.
One such asset class many investors have been right to take a harder look at of late is gold. The price of gold itself has been surging and still trades near an all-time high. Accordingly, a range of gold miners (which tend to provide even more upside to the price of gold in surging commodity price environments) have really taken off.
Here are two top Canadian mining leaders, and how I’d think about allocating a split between a $10,000 investment in this space right now.
Barrick Gold
Barrick Gold (TSX:ABX) is the world’s largest gold miner, so let’s start here, shall we?
The company saw its gold production increase 15%, while copper production surged more than 30% quarter-over-quarter. This surge in production has led to a stark increase in Barrick’s net earnings of nearly 70%, and makes this metals miner a top option investors want to consider.
I think Barrick’s ability to produce both precious metals and other metals such as copper is bullish for investors looking for greater defensiveness and diversification in the mining sector. Additionally, the company’s consistent dividend and stable balance sheet provide a large-cap option that’s worth considering, in my books.
Agnico Eagle
Agnico Eagle (TSX:AEM) has long been my top pick in the Canadian gold mining sector, for good reason. After the company’s acquisition of Kirkland Lake (one of my favourite gold miners in terms of asset quality), Agnico Eagle became a significant competitor to Barrick and one that has clearly provided big upside for investors in recent years (as the chart below shows).
The company’s recent financials paint a rosy picture in terms of the company’s outlook. Agnico Eagle posted record cash flow of $2.1 billion in 2024, and this year looks to be even better with the company’s recent earnings per share expected to nearly double in 2025. That means the company’s current valuation of roughly 24 times isn’t as steep as many may think.
Of course, gold prices will continue to fluctuate, and it’s hard to extrapolate prices rising forever. But for now at least, Agnico Eagle looks well-positioned to remain a top player in this sector for some time to come.
How to split a $10,000 investment between the two
Personally, I like both the defensiveness and diversification Barrick provides, as well as the growth upside of a gold miner like Agnico Eagle. For long-term investors looking to build a position in gold miners with $10,000, splitting this allocation between the two miners seems like the most logical choice right now.
