SHOULD YOU BUY GOLD STOCKS OR REAL GOLD BARS AND COINS?
Gold has been a good investment for many people with it now going for well over $1000 per ounce. However, some like to buy gold as an insurance against bad economic times and that is something we are looking squarely in the face. Just how bad things are going to get no one knows but many people think we haven’t even begun to feel the real pain high unemployment, out of control inflation, and economic chaos that might lie ahead.
If you want to buy gold as an insurance policy against this uncertainty, should you be buying gold stocks or should you be buying the real thing: gold bars and coins? Are gold stocks the best stocks to buy right now in 2010?
For years, it was thought that buying stocks of gold mining companies was almost the same as buying the gold itself. As the value of gold rises, often the value of these gold mining companies (like Kinross Gold) goes right up as well. After all, they are in the business of finding something that is getting more and more valuable so the value of the company must go up too.
However, if things get really bad with the economy, doesen’t that affect the ability of these gold mining companies to do business? It impacts their hiring, borrowing, purchasing, and every aspect of their business if the economy totally collapses. So, even though they are in the business of gold that might be doing well, their ability to do business is of major importance.
It seems that owning a gold stock in these tough times is more risky than owning real gold instead. I may be wrong but in really bad times, I want to have something in my hands that I can tough and feel rather than a piece of paper that says I own a stock.
Owning gold bars or coins can be very cumbersome, especially if you own a lot. Most people keep them in safe deposit boxes or a safe in their house. Others have been known to even bury the gold somewhere on their property. Dealing with the physical problems of keeping gold safe from theives has been the thing that has always deterred me from owning the bars or coins. I have opted for owning gold stocks and done well enough with them so far.
But now that the economy is really in shambles and showing no signs of turning around, it makes me wonder whether owning real gold might be the way to go. Rather than bothering with how to buy stocks online, maybe I should be concentrating on how to buy gold online. What is your opinion?
