how to invest in gold stocks

Know The Basics Of Investing In Gold Stocks

When most people think about investing their money, they do not really think about putting it into gold. Because of this, the stock market has significantly outperformed gold as an investment, but times might be changing.

Stocks have performed very well throughout 2019 but the overall market feeling as of late has not been great. Gold prices are rising while the uncertainty around the market jumped. If this bullish market comes to an end, gold stock investors might see crazy momentum even in a “bad” economy.

How To Buy Gold Stocks In 2019

Because of all this uncertainty, you might want to look into how you can buy gold stocks. There are a few ways to do this. Investing in gold coins, for example, is impacted directly by the price of gold. You can also invest in gold exchange-traded funds like the SPDR Gold Trust (GLD Stock Report) which allows for the indirect ownership of gold bullion. Some ETF’s like the VanEck Vectors Junior Gold Miners (GDXJ Stock Report) invest in gold mining companies that perform better when gold is valued higher.

gold stock chart

When looking at the year-to-date numbers, all types of gold investments have been killing it in 2019. Gold bullion had a rate of return of 17%, large-cap miners 32%, and small-cap miners had a return of 27%. Larger mining companies tend to have an advantage over smaller mining companies because they have established long-term financial viability. This is one of the leading reasons that it has higher returns then small-cap miners.

Even though the numbers from earlier are very impressive, notable investors like Warren Buffet advise against investing in gold. The problem with these opinions is that a very well-run gold mining company can bring back great returns like any other company. Furthermore, gold historically has thrived in times where the equity market may struggle so it is definitely worth taking a look at.

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