Investing in gold mining stocks

mountain-gold-mineGiven the current instability and vulnerability of economies around the world, more individuals are now looking to invest in gold. Nowadays, gold is seen as the essential umbrella against the raging economic storm that threatens every individual’s financial stability.

Investing in gold serves to diversify a financial portfolio, and it is also a great hedge against an unstable economy. Of the different gold investments, gold bullion has seen an ever increasing demand. It is a known fact, though that gold bullion is an expensive gold investment. However, if you want a better alternative, gold-mining stocks are great for long-term investments too.

In recent years, it is observed that the prices of gold mining stocks are relatively cheaper than gold bullion. A number of reasons have been attributed to gold mining stocks’ poor performance. For one, gold exchange-traded fund, which is another convenient method to invest in gold, has grabbed investment money from mining stocks and has become the preferred gold substitute for most precious metal investors. Then, there are also inherent operating costs involved in mining that have taken away the much needed extra income of mining companies. Nonetheless, gold mining stocks are still worthy gold investments. And although these stocks are more volatile than gold bullion, choosing a stable and bigger mining company than small players in the industry will minimize the chances of losing out on your investment. Aside from the fact that gold mining stocks are a lot cheaper than gold bullion, another reason why you should put some of your money into this investment is that you also earn profit through dividends.

The bottom line is every gold investment involves some amount of risk. So before making any decisions, be sure to retain the services of a professional financial adviser to guide you through the process of investing. Weigh every option you have and make sure to not put than more than 10% of your money in a single type of gold investment. Learn to invest in gold wisely!

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