4. Silver Wheaton Corp. (USA) (NYSE:SLW) : It can be difficult to make a strong case for long-term ownership of some miners, but a company like Silver Wheaton — which offers up-front cash investments in order to gain royalty interests in silver and gold mines — is a smart way to play the metal and mining sector.
Source: Armin Kubelbeck.
Silver Wheaton currently has 14 long-term silver contracts under its belt with an average silver purchase price of just over $4 per ounce. Doing the math on the current spot price for silver (as of this writing) nets Silver Wheaton a profit margin of about $23 per ounce. It should also be noted that Silver Wheaton isn’t responsible for any of the mines’ costs that it invests in beyond its up-front payments.
What makes Silver Wheaton extremely attractive is that the demand for silver is only going to increase as technological devices proliferate throughout the globe (silver is a great electrical conductor). With Silver Wheaton locking up a long-term silver and gold deal with HudBay Minerals last year, I feel confident its royalty interests engine still has plenty of life left in it.
5. Mastercard Inc (NYSE:MA) : With the younger generation using plastic now more than ever, it only seems logical for them to consider investing in payment facilitator MasterCard.
MasterCard offers investors a lot of incentives despite its minute dividend yield. For starters, both it and Visa are solely payment processors and not lenders, which absolves them from any liability that many of its peers carry if debtors don’t repay their loans.
Second, the emerging-market opportunity for MasterCard is enormous, with its chief financial officer, Martina Hund-Mejean, noting that 85% of all global transactions are still being conducted in cash.
Finally, there’s ample domestic demand and new modes of payment still in their infancy. Prepaid debit cards, for example, open up a whole new pathway of growth for MasterCard for consumers whose credit was ruined during the recession and who currently don’t qualify for a bank card. Don’t be shocked if MasterCard beats Google Inc (NASDAQ:GOOG) or Apple to $1,000 per share.
There you have it — five smart ideas for the younger investor looking to open or contribute to an IRA. Do you have a company you’ve invested in for your retirement account that you’d be willing to share with the community? Feel free to post your stock and your reasoning in the comments section below.
The article 5 Smart IRA Ideas for the Young Investor originally appeared on Fool.com and is written by Sean Williams.
Fool contributor Sean Williams has no material interest in any companies mentioned in this article. You can follow him on CAPS under the screen name TMFUltraLong, track every pick he makes under the screen name TrackUltraLong, and check him out on Twitter, where he goes by the handle @TMFUltraLong.The Motley Fool owns shares of Amazon.com, Apple, eBay, Google, JPMorgan Chase, MasterCard, Netflix, and Qualcomm. The Motley Fool recommends Amazon.com, Apple, eBay, Google, Netflix, and Visa.
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