For some people the notion to own gold is a natural one, or even an innate desire. Others could seem to not be able to care less when it comes to gold ownership. Back in the days when gold coins and silver coins were common carried currency, people really did not give gold and silver much of a though. Owning gold and silver was a given. Today however, there are questions that arise when one considers the purchase of gold, for instance; Do I buy gold or gold mining stocks?
Perhaps you originally set out to buy gold coins, and the “buy gold or gold mining stocks” question was brought up to you by someone else. Someone with an agenda. The question “gold or gold mining shares?” exists for a reason. There is an “or” in there. Buying gold mining stocks and shares will not get you physical gold. Perhaps it would be nice if the annual dividend arrived in the form of gold nuggets, but it wont.
Buy Gold Or Gold Mining Stocks, Know The Risks.
First of all, I need to state the obvious. The painfully obvious. The so painfully obvious that nobody ever thinks about it until they are pondering lost fortunes. The whole point of owning gold in the first place is to own physical wealth that you can hold that will not lose it’s inherent value.
The whole point of a gold mine is to strip out the inherent value so that all you are left with is an expensive hole. Gold mines are designed to eventually fail once all of the gold is extracted and sold for cash.
Buy gold or gold mining stocks? One will always be valuable, the other will relatively soon be worthless, or worse yet, a liability. All gold mining stocks face risks and pressures that physical gold does not. Read on.
Forces both political and natural can have devastating consequences on mining stocks and shares, and these forces seldom strike gold, and when they do, they tend to be much less specific. Take these accounts into consideration when you ponder whether to buy gold or gold mining stocks…
Gold mines flood and collapse. Gold mining is a dangerous business, and it is a worldwide business. This means your investment dollars may be going to places where mining is not well regulated. The poorly regulated gold mines are perhaps the most likely to experience calamities both in the physical realm and the financial realm.
I recall one day reading a report that a gold mine, a very deep gold mine, in Africa flooded and collapsed and they were searching for miners. Consequently I believe the cost of gold was in an upward rally. The profits of the holders of that particular mine were in a downward rally.
I also recall a day reading that Venezuela nationalized it’s gold mines. If you don’t know what nationalizing means in regards to gold mines, you can pretty much exchange the word “seize”, especially as far as the stockholders and shareholders of the gold mines are concerned. This would be an example of political power interfering, or devastating an investment in gold mining stocks and shares. Buy gold or gold stocks? Is gold looking more stable than a hole in the ground now?
You Can Buy Gold Or Gold Mining Stocks, But Only One Is Currency.
The differences between gold or gold mining stocks should be a little clearer, but there is still one big white elephant in the room that we should talk about. Gold is a currency. Gold has been a currency, around the world for thousands of years, If you hold it you can turn it into purchasing power. Stocks are not currency. Stocks have never been currency by definition. Stocks have been failing for thousands of years. A stock of any sort only has a limited number of redeemers or places where it can be turned into cash or purchasing power, gold has limitless numbers of redeemers.
Another point to bare is that you can compare the value of gold, which has been steadily rising against the dollar, to the rising costs of gold mining, which are also determined by the falling purchasing power of the dollar. When you put it his way, if the dollar collapses, and you can no longer run the gold mine, the gold mine and it’s shares collapse. Buy gold or gold mining stocks? Advantage: Buy Gold.
To add the stability of physical gold to your financial portfolio, please contact ITM Trading, and lets discuss the best way for you to own gold.