Buying Gold Coins vs Gold Stocks

By: Jakob Jelling

Gold is slightly more risky than bonds, so you should be careful to pay attention to this. The reason for this is that while gold is used in some industries, it does not necessarily need to be worth as much money as it is. Also, part of the reason that gold is worth so much money is due to its comparative rarity. If the markets were to become flooded, chances are good that you would lose money. However, gold has a tendency to stay relatively stable, or to increase its value, over time.

How stable is gold investing?

  • The demand for gold is much higher than its supply. Once there is more supply than demand, the price starts to rise. Since the demand for gold is almost twice the amount that is actually mined, the prices for gold are likely to go up steadily.

  • This also means that it is still a good time to invest in gold. The reason for that is that prices for gold need to go up so that there is not a gold shortage in the world. (After all, the increase in prices will decrease the demand until finally, there is no more gold shortage).

Why Buy Gold Mining Stocks
Buying Gold Coins vs Gold Stocks

  • Dont Invest in Just 1 Type of Gold
    The first thing that you should keep in mind about gold investing, is that you should not put all of your money into one type of gold investment.
  • Gold Bars & Gold Coins Can Be Stolen
    You should also not just go out and buy a bunch of physical gold without doing research on how you plan to store them and resell them. Investing in Gold bars or Coins means you need to purchase storage space to keep it. Adding safes or deposit boxes in banks will cost you money instead of receiving dividends from stocks.
  • Miners Can Always Produce More Gold
    Many gold mines are not producing at their top amount yet, or in potential gold mines, you stand a chance of making more money in the future. Since gold is in such high demand, it is likely that any gold mines that are not producing much will start trying to produce more when prices go up. This means they can cash in on the high demand and higher prices as well. When Gold mines make more money, they will provide dividends to their shareholders. When you invest in Gold mines, not only will you save on storage fees, you still enjoy the extra cash you can make when Gold prices fluctuates and you get dividends. 
  • Gold Miners is The Way to Go
    As with many businesses, they can be risky especially if you are buying based on speculations. e.g News of potential mines who may strike gold soon. Mining is very expensive and many have lost money while pursuing Gold. But if you focused on the top 3 largest Gold miners, you will be able to ride through any rough patch and make money from Gold fluctuations. 

The top 3 gold producers in the world are stable, they have a tested management and operations know how and has the ability to raise cash easily if required and credible.

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