Hedging against inflation by investing in gold and silver

If you are interested in buying mining stocks, you should seriously look at the companies that make up the XAU index. The link to the XAU index with all the symbols is below. I've also linked to a Wikipedia page listing the percentage allocation of each company that the XAU follows.

XAU Index presented by Kitco
XAU presented by Wikipedia

There is also an ETF with the symbol "GDX" that is traded on the stock exchange. The name of the fund is called the Market Vectors Gold Miners ETF. I've listed the link to their website as well. However, by being an ETF it incurs certain costs and is subject to expense fees. However, these fees are very low at .55% per year. They are also subject to counterparty risk as well.

Van Eck's GDX page

The "GDX" fund is probably the easiest way to diversify with gold stocks as it includes a balance of small, mid and large cap mining companies. If you don't want small caps in your portfolio, then I highly recommend investing in all ten companies that make up the XAU index. However, I do not recommend "GDX" as there is too much risk involved. It is much better to invest in the miners directly without any counterparty risk.

There are also two other funds. Their holdings primarily consist of physical gold and/or silver bullion and are audited frequently. Again, being ETFs there are expense fees but they are relatively low.

CEF: Central Fund Of Canada - Mandated that at least 90% of its holdings must be in gold or silver bullion. Currently it is allocated at 57.7% gold and 39.6% silver with 2.7% being cash and other net assets.
http://www.centralfund.com/

GTU: Central GoldTrust - Holds 95% of its assets in gold bullion.
http://www.gold-trust.com/

Other than CEF and GTU, I would not invest my money in any other ETF that claims to hold or track silver or gold bullion. Many of them don't own the silver or gold bullion in the fund and hold paper certificates instead.

The best way to own gold and silver is to own the physical metal outright. Nothing beats having it right in front of you! You can do this many ways and they include Ebay, APMEX, BullionDirect, and your local coin shops.