Once the decision has been made to invest in some form of the precious metal gold, the next consideration becomes in what form of gold to invest. Gold bullion, coins, certificates, futures, options, mining stocks, jewelry, ETFs and mutual funds are the primary forms of investment. The decision often comes down to gold in its physical form versus gold stocks. There are several reasons to invest in gold stocks rather than physical gold.
Acquiring gold means that a place will need to be found to store it. It will also need to be insured, which costs additional money. In addition, it can take some time to sell gold in its physical form. Liquidity and storage are non-issues when investing in gold stocks because there is nothing to hold but a stock certificate and prospectus. It is also very easy to buy, sell, or exchange gold stocks on any day the stock market is open.
Gold stocks in the form of ETFs or mutual funds are managed by an investment professional. This person makes the buying, selling, and diversification decisions based on ongoing research and an eye on market performance. Investors do not need to concern themselves with these factors as they would need to when making their own investments in physical gold.
In general, the value of these funds move proportionally more than that of actual gold. Therefore, when gold prices are high, the value of these funds tends to be even higher. This provides an investor with additional profits not realizable through ownership of physical gold.
There are additional ways to invest in gold stocks that provide an individual with some interest in the actually commodity. Unhedged gold mining stocks have this feature, considered the best of both worlds by some investors. There are different options when it comes to purchasing gold stocks and investors should consider them all in light of the current portfolio prior to making a commitment.