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How to Invest in Gold Stocks?

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When it comes to the financial planning puzzle, most of us look for the best investment options suggested by an investment banker. Some may even look at investing in the stock market which usually plays a very big role. Apart from using it to make additional income, it’s also a good way to plan for retirement. Thankfully, technology has even made it very easy for anyone who would wish to get started. You can track the markets on the online financial sites. What’s more, you can also do the same on your tablet or smartphone using some of their apps. But how can you invest in gold stock?

How to Invest in Gold Stocks?

Since 2001, the price of Gold has moved from $265 to over $1300 in 2007. This means it has realized a cumulative return of over 390%. For several years now, Gold has been recognized as a currency. In addition to having a recognized value, it has also played a great role against inflation. However, at these prices buying physical gold might be a bit hard especially if you are a small investor. Also, you may decide to get a large portfolio of gold coins and bullion. Hence, storage and security may become a major concern. The trading feature is also not one of the best options for small investors. This is because it requires high maintenance margin and active monitoring.

Investing in stock giving you access to gold is, therefore, a faster and more profitable process than investing in gold. Luckily, there are several Free stock alerts that you can use to know how your stock is doing in the market. But what are some of the ways to invest in gold in the stock market?

Use Gold Mutual Funds

In case you are hesitant to invest in physical gold, gold mutual funds will provide you with some of the best alternatives. These are the funds that hold portfolios of gold stocks from a large capitalized company. This company, usually, has been in operation for several years. They normally own established mines that produce large quantities of gold every year. For many investors, choosing such a company is a more conservative or moderate way to invest.

Invest in Stocks That Track Gold

While gold ETFs are a bit different from stocks, they are usually traded in the same way. The ETF invests in gold bullion that holds over 26 million ounces. The structure of ETF not only allows for baskets to be created but also to be redeemed according to the market demand thereby creating liquidity. As compared to buying an ounce of gold, the entry price is a bit low.

Invest in Junior Gold Stocks

Since junior stocks are less likely to win speculative mines, they have a high potential of earning profits and greater risk of loss. As compared to the capitalization of the senior gold stocks capitalization is likely to be smaller. The range of investments allowed here is for those whose risk tolerance is a bit broader and who are not bothered by the possibility of gold based loses in exchange for tipple gains.

As an investor, you, therefore, need to view the economic situation broadly and analyze any trouble that lies ahead. Thankfully, you can always use Free stock alerts to receive alerts.

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