http://www.caseyresearch.com/articles/3358/gold-stocks:-math-today,-magic-tomorrow/
While I prefer physical Gold, this article touches on owning mining company stocks. Interesting read on how stock prices of Gold companies have not increased (yet) as much as is realistic in relation to the price of Gold. Hard part is to decide which companies are actually worthy of investment.
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What are the long term differences in investing in gold and investing in gold mining companies?
ReplyDeleteInteresting, I think now is still a good time to buy. I just hope it doesn't follow the S & P too closely because if it dives again than gold might follow it, which would cause me to buy a ton of it. Gold needs to separate itself from market factors.
ReplyDeleteIn my humble Opinion, both have pros and cons for the long term. As Jim Rogers has stated, if you own the actual commodities you make 300% more on average. But that is on average, IF you were able to pick out good companies that were paying a healthy dividend and had good management, then you would be in a great situation. The problem that I have with investing in companies is how volatile it can be. Most, if not all mining happens overseas, and what if I had invested in a company that had mines in Venezuela where Chavez is now threatening to Nationalize the entire mining industry? It makes me nervous, but I think risk reward is greater on stocks, but it is a big IF, huge IF to me, about picking the right ones. I think that people who are going long on Gold have the Federal Reserve, the IMF, and the EU to thank for the continued gains they will see. I do know that Gold is close to the S&P, but I see it going (over the long term) no where but up. We are accelerating the destruction of our fiat currencies, and I am leveraged against it with the metals.
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