Gold stock investing – ways of owning gold
Gold stock investing has been looked upon by the investors as a hedge strategy to the lower the risk of their portfolio. Due to uncertainties in the market because of political unrest, inflation etc, it is recommended by analysts that you should have a part of your portfolio dedicated to commodities such as gold stocks.
GOLD BULLION
There are a few different ways in which you can invest in gold. Out of these options, two popular options are gold bullion and gold ETFs. Gold bullion has been a very old method of owning gold where the owner has direct gold ownership in the form of physical gold bars or coins. These gold bars or coins can be different shapes and sizes. There are advantages and disadvantages of owning gold coins directly.
Advantages –
- These gold coins are available easily at various financial dealers.
- They are certified on their weight and purity there have universal value
- They come in smaller sizes as well therefore people can choose how much they want to invest in gold
Disadvantages –
- There are insurance and storage costs associated with physical gold
- The value of gold keeps changes with the dollar value
- Unlike mutual funds, investors would have to pay a sizable amount to own gold
GOLD ETF and Mutual Funds
Gold ETF and mutual funds is another way to owning gold. The normal brokerage or IRA account can be used to buy and sell these ETFs. Each share of these specialized instruments represents a fixed amount of gold, such as one-tenth of an ounce. This is a much easier way to invest in gold since these mutual funds have very less expense ratios and you don’t have to worry about insurance and storage costs of physical gold as well. For the average gold investor, however, mutual funds and ETFs are now generally the easiest and safest way to invest in gold.
Gold Mining Companies
Investing in gold mining companies’ stock is another way of investing in gold. Whenever there is an increase in gold prices, the stock prices of gold mining companies also rise. Some of the popular gold mining companies are:
- Esperanza Silver Corporation (EPZ)
- Riverside Resources Inc. (RRI.V)
- Almaden Minerals Ltd. (AAU)
- Cornerstone Capital Resources (CGP.V)
- Gold Fields Limited (GFI)
- Newmont Mining Corporation (NEM)
- Tanzanian Royalty Exploration Corporation (TRE)
- Northgate Minerals Corporation (NXG)
- Yamana Gold, Inc. (AUY)
Gold Jewelry
Buying gold jewelry is a very enjoyable way of owning gold. Many people prefer to buy gold jewelry instead of gold bullion so that they can use it as well. But gold jewelry has lower value than bullion. It is not a profitable for of investment since jewelry makers add making charges which are not recoverable. As an art form gold jewelry is beauty but as an investment it is not recommended.
Conclusion
Different people have different preferences. Some people want the possession of physical gold and don’t mind paying large sum of money upfront. Gold bullion is best for such large investors. The gold jewelry should not be considered as a true investment at all. For others, gold stock investing can be done through Gold ETFs and mutual funds which is an easier and risk-free way to investing in gold.
Related posts:
- Buy gold coins online as an alternative to holding gold stocks
- Gold stock investments – why gold is still a buy?
- Is it good to buy Gold coin jewelry for investment in gold?
- Buy gold stock
- Gold Investing guide – Safeguard your stock market investments
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Tagged With buy gold, buy gold bullion, buy gold stock, gold as hedging strategy, GOLD ETF, gold mining companies, gold mutual funds, gold stock investing, gold stock investments, invest in gold, investing in gold jewelry
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