Mining Royalty Companies: Steady Returns on Precious Metals

Mining royalty companies offer an intriguing gateway into the world of precious metals investing. They generate steady revenues without having to build mines, operate complex machinery, or worry directly about workforce challenges in remote regions. These specialized entities focus on securing royalties or streaming agreements, which entitle them to a slice of production—or the right to purchase a fixed portion of production at a discounted rate—from a variety of mining projects. The result? They can achieve stable cash flows and gain leverage to rising precious metal prices—often with less exposure to the operational pitfalls that plague traditional mining firms.

It’s a fascinating niche.

On the surface, you might wonder how these companies differ from conventional miners. After all, they both deal with the extraction of gold, silver, or other commodities, right? In reality, their business models diverge quite significantly. Traditional mining companies shoulder enormous capital costs, from building processing plants to hiring entire teams of geologists and engineers. They also handle ongoing responsibilities like environmental reclamation, energy consumption, and worker safety. Royalties, on the other hand, are typically passive. A mining royalty or streaming firm doesn’t need to get its hands dirty with extraction. Instead, it negotiates contracts entitling it to a slice of the income (or the actual commodity) once the mine is operational.

For investors, this distinction can be vital. Mining royalty companies are generally seen as lower risk than full-scale miners, but they still enjoy exposure to the upside of rising metal prices and increased production volumes. Should the market environment turn unfavorable—say, commodity prices drop or a mine faces unexpected shutdowns—these companies might still see reduced revenue, but at least they’re not stuck with the direct overhead of maintaining a costly operation. Their overhead is typically lean. They often employ smaller management teams, focusing on scouting deals and managing financial arrangements rather than performing large-scale capital expenditures.

This model appeals to many.

Think about the cyclical nature of precious metals. During bull runs, investors flock to gold, silver, and other metals as safe havens or speculative plays. Mining royalty companies can thrive in these periods because higher prices mean higher revenue from their interests. They capitalize on the mines’ success without significantly increasing their own expenditures. In bear markets, while royalties won’t insulate them fully from falling commodity prices, they’re often better positioned than pure-play miners. Why? Because they’ve already locked in some contracts and typically have a diversified portfolio of royalty streams across multiple mines.

Moreover, these companies come in different flavors. Some target only gold, while others diversify into silver, copper, nickel, or even battery metals like cobalt. Some prefer advanced-stage mines that are already producing, while others take on more speculative agreements to secure royalties on projects still under development. This broad spectrum means investors can choose royalty companies that align with their own risk tolerance or commodity outlook, be it gold-centric or more wide-reaching.

Over the years, a handful of standout royalty firms have proven that this business model can be not just profitable, but incredibly resilient. Entities such as Franco-Nevada, Wheaton Precious Metals, Royal Gold, and Sandstorm Gold have each managed to build portfolios that span dozens—if not hundreds—of mining operations worldwide. By strategically acquiring royalties at different stages, these companies create a growth pipeline: some assets generate immediate cash flow, others promise future gains once mines ramp up production, and occasionally, newly acquired streams can present immediate upside if the operator fast-tracks a project or discovers expansions.

For those unacquainted with the day-to-day workings of mining, this model can appear complex. But the fundamental idea is straightforward: royalty companies pay upfront (or arrange financing) in exchange for the right to benefit from future production. Because they don’t directly run the mines, they aren’t as exposed to labor disputes, rising diesel costs, or machinery breakdowns. These remain the operator’s headaches.

Yet, like all investment vehicles, mining royalty companies aren’t without risks. Commodity price fluctuations affect their streams. If the mining operator mismanages a project or faces political turmoil in the host country, the royalty company could see diminished returns. Valuing these firms can also be trickier than analyzing a pure mining company, given how each set of royalties has its own timeline, production forecast, and commodity exposure.

It’s a balancing act.

What Are Mining Royalty Companies?

Mining royalty companies are financial entities that focus on acquiring and managing royalty or streaming agreements tied to mining operations. They act as specialized financiers for mining projects, providing capital to operators (the companies that actually dig and process ore) in exchange for a slice of future production or revenue.

In simpler terms, imagine that a mining company needs funding to develop a gold deposit. Rather than issuing new shares that dilute existing shareholders, or taking on high-interest debt, it might approach a royalty firm. The royalty company provides money upfront—maybe to build infrastructure or upgrade facilities—and in return, the mining operator commits to paying a percentage of the mine’s future revenues or giving the royalty company the right to purchase a certain amount of gold or silver at a discounted price. Once production commences, the royalty firm receives regular payments or deliveries, often for the life of the mine.

The Core Models: Royalties vs. Streams

1. Royalties
   • Revenue-Based Royalty: The royalty company takes a small percentage (e.g., 1–3%) of the mine’s gross revenue. This model is frequently called a Net Smelter Return (NSR) royalty if the mineral is processed through a smelter or refining facility.
   • Profit-Based Royalty: The royalty firm gets a share of the mine’s profits. Also known as a net profits interest (NPI), this arrangement is less common because it can introduce disputes or complexities about the operator’s accounting.
2. Streams
   • In a streaming agreement, the mining royalty company pays an upfront sum to secure the right to purchase a certain commodity—often gold or silver—at a fixed, below-market cost once the mine is in production. If the mine produces more than the expected amount, the streaming company benefits from higher volumes. If the mine underperforms, the royalty firm receives less metal.
   • Streams are favored by mining operators who prefer to lock in a predictable source of funding without parting with as large a share of their future revenue. However, from the royalty firm’s perspective, streams can be extremely lucrative if metal prices rise above their agreed-upon purchase cost.

Comparison to Traditional Miners

Traditional miners like Barrick Gold or Newmont Corporation own and operate the full cycle of a mine—exploration, development, production, refinement, and even closure procedures. This includes environmental compliance, maintaining extensive workforces, and tackling day-to-day uncertainties such as ore grade fluctuations or equipment failures. In exchange, they get the lion’s share of any profits if the mine succeeds.

Mining royalty companies, by contrast, are largely hands-off. They don’t manage drilling schedules or run a fleet of trucks. Their primary tasks revolve around:

• Finding Deals: Seeking out operators that require capital.
• Evaluating Project Feasibility: Conducting geological, financial, and political risk assessments.
• Negotiating Royalty or Streaming Contracts: Deciding on an upfront payment, the percentage of revenue or the discounted purchase price, and other contractual details.
• Ongoing Monitoring: Tracking output, verifying production reports, and collecting their share of revenue or precious metal deliveries.

It’s akin to being an investor rather than a business owner in the traditional sense. They front money, then collect a slice of the spoils. This can be more stable. Yet, it also depends heavily on the skill of management to pick projects that will ultimately deliver consistent production and endure cyclical metal price swings.

Flexibility and Scale

Royalties typically apply to specific mines or projects. That means a single royalty company might have dozens or even hundreds of individual agreements scattered across the globe. Some might be large-scale, high-profile gold mines; others might be smaller silver or copper operations. This diversification helps manage risk: if one mine underperforms or faces a shutdown, the company can still earn revenue from its other royalties.

Additionally, scalability is built into the model. Royalty firms don’t need to worry about building new processing plants or employing thousands of workers each time they secure a new royalty. They can simply cut a deal with the operator, structure the contract, and move on to the next potential transaction. This approach can allow for rapid growth, provided the market environment supports new deals and capital is available at favorable terms.

Future Expansion

Mining royalty companies aren’t just about precious metals. While gold and silver are typically the main draws, some royalty firms have expanded into platinum group metals, copper, or even emerging metals tied to battery technology, like lithium and cobalt. The principle remains the same—exchange capital for the right to future production—but the risk-reward profile can shift, especially with metals that have more industrial demand.

In short, these companies fill a niche financing need within the mining industry. They provide an alternative for project operators reluctant to raise equity or load up on debt, while simultaneously offering investors a chance to tap into precious metal revenues without the complexities of mine operation. This synergy has propelled their popularity and is why many consider mining royalty companies to be an essential subcategory of the metals and mining investment universe.

Benefits of Investing in Mining Royalty Companies

What makes mining royalty firms so appealing to investors? On the surface, their approach seems like a no-brainer: they can collect revenue from multiple mines without the capital-intensive and operationally complex tasks that define traditional mining. Below, we delve into the core advantages that often make these companies a staple for those seeking exposure to precious metals with potentially reduced risk.

1. Steady Cash Flow

One of the biggest draws for investors is the predictability of revenue streams, especially for established royalty portfolios. Once a mine is up and running, the royalties or metal streams generate recurring cash flows. This cash flow can be significant if the mine is large or highly productive. Because the royalty company doesn’t typically pay for ongoing operating costs, its margins can be robust, leading to stable or even growing dividends for shareholders. For those who favor income-oriented strategies, certain mining royalty companies might serve as attractive dividend plays in the metals sector.

Cash flow matters.

2. Lower Risk Exposure

Traditional miners grapple with numerous risks:

• Operational: Machinery failures, rising diesel prices, labor strikes, or falling ore grades.
• Regulatory: Environmental regulations, mine permitting challenges, and local opposition.
• Capital: Large, upfront expenditures for construction, equipment, and exploration.

While royalty firms aren’t wholly immune to these factors—after all, if a mine shuts down, they lose that revenue—they aren’t directly on the hook for day-to-day operational issues. Their risk is generally more financial and geologically spread across many projects. This structure translates to less vulnerability to any single project’s woes, a stark contrast to a miner that might invest billions in one flagship mine.

3. Diversification

By owning shares in a large royalty company, you gain access to multiple mines scattered worldwide. This inherently diversifies geographic, political, and geological risk. A major operational mishap at one mine might slow down overall revenue, but it won’t necessarily sink the entire portfolio. For example, if a company has royalties in North America, South America, and Africa, a sudden shift in political policy in one nation won’t necessarily halt revenue streams from the others.

4. Scalability

When a typical mining company wants to expand production, it often must acquire or develop new properties, invest in expensive equipment, and hire more personnel. A royalty company, by contrast, can scale more efficiently:

• Acquire New Royalties: They simply negotiate fresh deals.
• Limited Overheads: A small management team may oversee dozens of contracts.
• Less Capital Risk: They often fund a portion of the project’s development costs, but they’re not running an entire operation.

This advantage allows royalty companies to grow their top line quickly if they can source a consistent flow of attractive deals.

5. Leverage on Metal Prices

Mining royalty firms still benefit from rising metal prices. When gold or silver prices climb, the value of royalty payments (based on a percentage of revenue) increases. For streaming agreements, the difference between the agreed-upon purchase price and the market price can widen, leading to higher profits per ounce. Unlike miners, these companies typically don’t face equally escalating operating costs during bull markets. While a miner might see some margin gains when gold prices rise, it might also deal with higher wage demands or more expensive machinery. Royalty firms, in contrast, simply enjoy a larger revenue check for each ounce sold.

A real win-win.

6. Consistent Dividend Possibility

A notable feature of established royalty companies is their ability to pay dividends. Some have a track record of consistent or even growing dividends over time, thanks to the reliable nature of their income. This can make them especially appealing for investors who want exposure to precious metals but also desire some yield. Traditional gold miners, while they may pay dividends, often struggle to maintain payouts during low-price environments since their operational costs remain high. Royalty companies, with comparatively minimal fixed costs, can be in a stronger position to sustain dividends.

A Word on Growth vs. Stability

Within the universe of mining royalty companies, you’ll find those that prioritize growth by aggressively acquiring new royalties and streams, even if it means taking on debt or issuing new equity. Others may focus on stabilizing their existing portfolio and paying out a higher portion of earnings as dividends. Your choice as an investor might hinge on whether you want a growth-oriented story (and the accompanying potential for capital appreciation) or a steady income generator with less share price volatility.

In essence, the main benefit of investing in mining royalty companies is exposure to the upside of precious metals—especially gold and silver—without assuming the bulk of the operational and environmental hazards. Yet, the model isn’t foolproof. Commodity price fluctuations and reliance on third-party operators do introduce potential pitfalls, as we’ll discuss later. Still, many investors see the trade-offs as well worth it, especially when compared to the complexities inherent in running an actual mine.

Notable Mining Royalty Companies and Their Models

Some mining royalty firms have become household names—at least among investors interested in precious metals. They’ve gained reputations for solid management, shrewd deal-making, and a track record of reliable returns. In this section, we’ll profile a few key players, giving you a sense of how they operate and what sets them apart. Understanding these examples is helpful whether you’re a new investor exploring the space or a seasoned pro seeking more in-depth insights.

Franco-Nevada Corporation

Franco-Nevada is often cited as the gold standard (pun intended) among royalty and streaming companies. Founded decades ago, it pioneered many of the strategies that have become standard in the industry today. Franco-Nevada holds interests in gold, silver, platinum group metals, and even oil & gas properties, illustrating its commitment to diversification. The company has zero debt, a testament to its conservative approach to financing.

• Business Model:
  Franco-Nevada secures both royalties and streaming agreements, spanning projects at various stages—from early exploration to well-established producing mines.
• Portfolio Breadth:
  The company boasts hundreds of assets, although not all are active producers yet. This pipeline of non-producing royalties could bring future cash flow if and when operators advance those projects.
• Financial Stability:
  Historically, Franco-Nevada has maintained a strong balance sheet and a commitment to returning capital to shareholders via dividends.

Wheaton Precious Metals

Formerly known as Silver Wheaton, Wheaton Precious Metals is recognized for popularizing the streaming model, particularly focused on silver. Over time, it expanded into gold and other metals as well. This focus on streaming (as opposed to pure royalties) means it often negotiates for the right to purchase a commodity at a fixed cost, benefiting significantly if the spot price climbs.

• Streaming Specialization:
  Many of Wheaton’s cornerstone agreements are with large miners who produce silver or gold as by-products of base metal operations. This provides exposure to precious metals that might otherwise be overlooked by the primary operator.
• Low Operating Costs:
  As a streaming company, it primarily deals with the negotiation and execution of contracts, leaving operational complexities to partner mines.
• Growth Strategy:
  Wheaton continues to ink new deals with emerging projects, often focusing on stable jurisdictions to reduce geopolitical risk.

Royal Gold

Royal Gold has also carved a niche in the precious metals royalty scene. Headquartered in Denver, it’s known for acquiring high-quality royalties in stable regions, though it does have some diversification internationally. Royal Gold often emphasizes the net smelter return (NSR) royalty structure, where it receives a percentage of the revenues from the smelter or refinery, making it straightforward to calculate its share.

• Key Assets:
  Royal Gold’s portfolio includes royalties on flagship operations like Mount Milligan in Canada and the Cortez mine in Nevada.
• Financial Health:
  Historically, the company has utilized a mix of cash and stock to finance deals, aiming to balance growth with prudent leverage levels.
• Dividend Record:
  Royal Gold has a consistent history of dividend payments, reflecting a commitment to shareholder returns.

Sandstorm Gold

Considered a more aggressive growth story compared to the others, Sandstorm Gold has rapidly acquired a sizable portfolio of streaming and royalty agreements. The company’s management team has not shied away from earlier-stage projects, hoping to secure more lucrative deals by entering before a mine hits full-scale production.

• Junior Mine Exposure:
  A significant portion of Sandstorm’s deals comes from smaller mining firms. These projects can offer higher returns if they reach commercial production but carry elevated risk.
• Acquisition Focus:
  Over the past decade, Sandstorm has made multiple acquisitions of entire royalty portfolios from other companies, expanding its own footprint quickly.
• Balance of Risk and Reward:
  By nurturing partnerships with junior miners, Sandstorm stands to benefit substantially if those mines become major producers, though it faces a greater risk of non-starters or delayed development.

Examples of Successful Royalty Agreements

• Franco-Nevada & Goldstrike Mine (Nevada):
  Franco-Nevada’s early royalties on Goldstrike, one of Barrick Gold’s flagship operations, fueled its growth for years. The consistent cash flow from this high-grade, long-life asset helped Franco-Nevada become an industry icon.
• Wheaton Precious Metals & Salobo (Brazil):
  Wheaton’s streaming agreement with Vale’s Salobo copper-gold mine has proven exceptionally lucrative. As copper production ramped up, gold output also increased, providing Wheaton with a consistent stream of precious metals at favorable prices.
• Royal Gold & Cortez (Nevada):
  Royal Gold’s NSR royalty on the Cortez mine, operated by Barrick, has been a linchpin for revenue. Cortez is known for its robust gold production and extensive reserves.

These examples highlight how the right deal at the right mine can deliver steady returns for many years, if not decades. Of course, not every royalty ends up a blockbuster. Some mines underperform or take far longer to develop. Still, a well-managed royalty portfolio can absorb these disappointments, as the winners often more than compensate for the losers.

The Competitive Landscape

It’s worth noting that competition for attractive royalties has intensified. Once a niche segment, royalty and streaming firms now represent a thriving sub-sector, pushing up valuations and prompting operators to demand higher upfront payments or more favorable terms. This means established players must keep innovating or be willing to venture into less explored territories (either geographically or in commodity choice) to secure deals that yield high returns.

In summary, these companies demonstrate the variety in scale, strategy, and asset focus that characterizes the mining royalty industry. Some are conservative and diversified, while others chase higher risk-reward deals. The common thread is their pursuit of stable, low-overhead exposure to precious metals. Investors interested in the sector can choose from a range of approaches, picking the firm that best aligns with their own investment style—be it a preference for growth, dividends, or balanced risk profiles.

Risks and Considerations for Investors

While mining royalty companies often look like a lower-risk play on precious metals, they’re not immune to market downturns or operational hiccups at the mines to which they’re exposed. Before you jump into this sector, it’s crucial to understand the array of potential pitfalls. After all, no investment is foolproof, and precious metal markets themselves can be notoriously volatile.

1. Commodity Price Volatility

This one is straightforward: royalty revenue depends on metal prices. If gold, silver, or other relevant commodities experience a prolonged slump, the royalty company’s income takes a hit. While a diversified portfolio of mines can buffer short-term fluctuations, a deep, multi-year bear market could significantly reduce cash flows and compress valuation multiples. Investors seeking stable returns must be prepared for the cyclical nature of precious metals—prices can surge in times of economic uncertainty but can also slump if interest rates rise or global growth cools.

2. Geopolitical Risks

Mines are located around the globe, including regions where political stability is less assured. A mine in a geopolitically unstable area might face nationalization, expropriation, or sudden regulatory changes that harm production. In the worst-case scenario, conflicts or civil unrest could disrupt operations entirely. Although royalty companies typically try to secure agreements in mining-friendly jurisdictions (like Canada, Australia, or parts of the U.S.), many also hold deals in countries with heightened risk to find better pricing or resource prospects. Geopolitical risk is a double-edged sword: it can lead to high returns if the project proceeds smoothly, but also cause abrupt revenue declines if a mine is forced offline.

3. Mine Performance Dependency

Even though royalty firms aren’t responsible for day-to-day mine operations, their success is still tied to the operator’s competence. If the operator encounters technical issues—like poorer-than-expected ore grades, mechanical breakdowns, or poor management—production could falter. Royalty income might then lag behind initial projections. Some royalty agreements have minimum payment clauses, but those can be limited or expire after a certain threshold. Thus, if a mine performs poorly over the long term, that portion of the royalty company’s portfolio may be a drag on total returns.

Operators matter.

4. Competition for Royalties

Mining royalty deals have become more competitive as institutional capital recognizes the attractiveness of these models. The result? Operators may demand higher upfront payments or more advantageous terms, cutting into the potential upside for royalty companies. For instance, a streaming firm might have to offer the miner a lower ongoing payment percentage (or a more favorable purchase price for metals) to win the deal. This heightened competition can pressure margins and make it more challenging for royalty companies to find truly lucrative deals.

5. Valuation Challenges

Valuing a traditional mining company often involves analyzing production costs, reserves, and projected cash flows from a single set of mines. With royalty companies, each contract can have a different duration, production schedule, commodity exposure, and risk profile. This complexity can lead to a wide range of analyst forecasts and make it difficult for casual investors to fully grasp each contract’s contribution to the bottom line.

• Discounted Cash Flow (DCF) analyses can help if you have reliable production estimates, but mines can experience unforeseen issues that alter these estimates.
• Net Asset Value (NAV) calculations must incorporate each royalty’s or stream’s production timeline and expected margins, plus intangible factors such as exploration upside.

If you’re not comfortable with the intricate modeling required, you risk mispricing the stock. Of course, some investors take a simpler approach—using price-to-cash-flow multiples or comparing dividend yields across the sector. But remember that each royalty portfolio is unique. The gold you’re “buying” via one company may be quite different (in terms of jurisdiction, stage of development, etc.) than what you’d get from another.

6. Potential Overconcentration

Royalty companies aim for diversification, but that doesn’t mean every firm is equally spread out. Some might rely heavily on one or two cornerstone projects for a large share of revenue. If anything happens to those projects—like a forced closure or geological disappointment—the company’s earnings might nosedive. Always check an entity’s revenue breakdown across its key assets. If more than 40–50% of revenue stems from a single mine, that’s a red flag indicating higher concentration risk.

7. Macroeconomic Factors

Finally, the broader macroeconomic climate can affect mining royalty stocks. For example:

• Rising Interest Rates: Often put downward pressure on gold prices, since higher yields from bonds can reduce the appeal of holding non-yielding assets like gold.
• Currency Fluctuations: If a royalty is paid in a local currency that depreciates against the U.S. dollar, the dollar-denominated revenue might shrink.
• Investor Sentiment: Precious metals can swing based on fear-driven buying (e.g., during economic recessions) or cyclical rotations (when investors chase growth stocks, metals may lag).

In other words, there’s no guarantee that a royalty firm’s stock price will remain stable or climb just because it’s “lower risk” than a mining operator. In a major market correction, even high-quality royalty companies can see their share prices pull back significantly.

Risk is unavoidable.

Conclusion

Mining royalty companies occupy a unique corner of the precious metals investment landscape. They provide capital to mining operators in exchange for a share of future production—either as a percentage of revenue or the right to buy the metal at a discounted rate. This approach gives them direct exposure to the upside of commodity prices without many of the capital and operational risks that plague traditional miners. It’s a compelling model, one that has generated impressive returns for some of the big names in the industry.

Key Takeaways

• Less Operational Burden: These companies don’t handle drilling, hauling, or workforce management. That makes them leaner and often more resilient when mines face operational hiccups.
• Diversification: By holding royalties on multiple mines across different regions and metals, they spread risk more effectively. A single problematic operation rarely dooms the entire enterprise.
• Stable or Growing Cash Flows: Once a mine achieves commercial production, the royalties can create a steady income stream. Larger, well-established royalty firms often share these profits via consistent dividends.
• Exposure to Commodity Cycles: While less vulnerable than miners, royalty firms remain tied to the ups and downs of precious metal prices. A prolonged slump can reduce royalty revenue.
• Valuation Complexity: Understanding each contract’s nuances—duration, production schedules, commodity mix—demands deeper research than simply reading a single P/E ratio.

You must do your homework.

When It Makes Sense

Mining royalty companies can make sense if:

1. You’re Bullish on Precious Metals: You want leveraged exposure to gold and silver, but you’re wary of the high operational risks among pure miners.
2. You Appreciate Diversified Revenue: The idea of a portfolio spanning multiple mines, metals, and jurisdictions appeals to your risk management instincts.
3. You Seek Potential Income: Some of these firms pay reliable dividends or at least have a track record of returning cash to shareholders.
4. You Can Handle Commodity Cyclicality: You understand gold can swing widely and that short-term price dips might temporarily dent cash flow and share prices.

Final Thoughts

Mining royalty companies are not a silver bullet. They still face commodity price risk, geopolitical uncertainty, and reliance on operators’ competence. But they frequently present a lower-risk alternative to direct mining equities, offering consistent revenues and broad diversification within the metals sector.

If you’re intrigued, your next steps might include:

• Researching Specific Companies: Understanding the revenue composition, key assets, debt levels, and management’s track record of smart deals.
• Analyzing Dividend Policies: Some firms are more generous or consistent with dividends, appealing to income-oriented investors.
• Monitoring Metals Markets: Keep an eye on gold, silver, or other relevant commodities. If prices show signs of entering a bull cycle, royalty companies may be poised to profit.
• Assessing Risk Tolerance: Recognize that while royalty firms carry fewer operational risks, they can still experience volatility. Evaluate how they fit into your overall portfolio strategy.

Mining royalty companies can offer a compelling blend of stability and growth potential, so long as you accept that metal prices and mine performance may fluctuate. They can serve as an excellent complement to a broader commodities allocation or even stand on their own for those seeking specialized exposure to gold and silver. The key is balancing your enthusiasm for these unique structures with the due diligence required to understand their intricacies. Execute that well, and you may find a portfolio addition that shines brightly over the long haul.

Important Information

Investment Disclaimer: The content provided here is for informational purposes only and does not constitute financial, investment, tax or professional advice. Investments carry risks and are not guaranteed; errors in data may occur. Past performance, including backtest results, does not guarantee future outcomes. Please note that indexes are benchmarks and not directly investable. All examples are purely hypothetical. Do your own due diligence. You should conduct your own research and consult a professional advisor before making investment decisions. 

“Picture Perfect Portfolios” does not endorse or guarantee the accuracy of the information in this post and is not responsible for any financial losses or damages incurred from relying on this information. Investing involves the risk of loss and is not suitable for all investors. When it comes to capital efficiency, using leverage (or leveraged products) in investing amplifies both potential gains and losses, making it possible to lose more than your initial investment. It involves higher risk and costs, including possible margin calls and interest expenses, which can adversely affect your financial condition. The views and opinions expressed in this post are solely those of the author and do not necessarily reflect the official policy or position of anyone else. You can read my complete disclaimer here.