Gold Investment Stock Tips for Wary Buyers

In economic downtimes, many turn to gold investment stock as a way to store their money safely. Of course, these times are when the price of gold rises the highest, so investors should be wise about putting money into gold. Here are some tips for gold investing.

Know Yourself

First determine what kind of gold investor you are. Are you investing in gold as a speculator – someone who is trying to turn a quick profit? Are you an investor – someone who is looking for growth and steady return? Or are you saver – someone who wants gold as a part of your long-term overall investment strategy?

Invest in Gold First

As an investment strategy, one of the primary reasons for investing in gold is its long-term value. For that reason, investing in actual gold bullion is the safest and most secure means of investing in gold.

A foundational investment in real gold is a great way to have security for you investments in the long term.

Know What Gold Stock Is

Before investing in gold stocks, it’s beneficial to know exactly what it is that  you have chosen as a place for your investment money.

Gold stocks are not investments in actual gold. Instead, they are investments in shares of gold mining companies.

The underlying philosophy of investing in a gold mining company is that when the price of gold goes up, the price of stock in gold mining companies will also go up.

Know the Company

In economic downtimes, the price of gold often rises. This may lead investors to indiscriminately purchase gold stocks since they assume that every company in gold mining will increase its stock price if the price of gold goes up.

This isn’t the case, however. You should take all possible factors into account when deciding whether or not to buy gold stock.

For example, you should educate yourself on the management of the company and their ethics. Know about the company auditors and their reputation for oversight. You should also consider the geologists on staff and their record for successful gold discovery and prediction. A gold mining company that can’t find gold will not see a rise in stock price.

Find out about the trade unions to which the company is obligated and their obligations to the workers. See if the company is actively exploring, what kind of cost basis it has and if the business has run into environmental, national, or political difficulties in the past. All of these factors will determine whether or not the company is a good investment, even if the price of gold is on the rise.

Consider Individual Gold Shares

The individual gold share is a riskier investment than stocks, but as is common with higher risk, it carries a higher potential for return.

Look at a company carefully before investing in a gold share. If the company is  a mid to large company, is not hedged, has significant reserves and a good earnings history, and has shown that it has an effective management team, then it may be a good share investment risk.

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