The knock on gold for years has been that it’s not an investment, that it doesn’t produce revenue, pay you interest or dividends. Famed investor, Warren Buffett has been quoted in the past as saying: “It doesn’t do anything but sit there and look at you.” However, there is a way for investors to gain exposure to the gold market and still generate a yield. Now, it won’t come from buying physical gold bullion or trading gold futures contracts. You can receive income from gold and still benefit off its potential rise by buying gold stocks that offer a dividend. The
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Since 2001, the price of gold has moved from $265 an ounce to over $1,300 in 2017. That’s a cumulative return of over 390%. Gold has been recognized as a currency for thousands of years. It has a universally recognized value, viewed as a hedge against inflation, and adds diversification to a portfolio consisting of stocks and bonds. However, at these current prices buying physical gold is out of the question for small investors. Also, if you do decide to amass a large portfolio of gold bullion and coins security and storage become a concern. Trading futures is also not
Investors are interested in silver for many reasons, whether it’s a hedge against inflation, flight to safety, or even speculative purposes. Now, there are several ways someone can gain exposure to the silver market. However, if you want something that is hassle free, then buying silver stocks is the way to go. Investing in silver companies is easier and more convenient than buying physical silver or trading silver futures. Physical silver can have high transaction and storage costs. On the other hand, silver futures contracts require active management. Huge volatility spikes could lead to receiving a margin call. In order
Investing in gold stocks adds diversification to a portfolio. Historically, gold has had a negative correlation to equities. It’s also viewed as a hedge against inflation and a flight to safety investment. Why should you buy gold stocks instead of owning the physical metal? Gold bugs will argue that if you don’t have gold your hand you don’t own it. However, there are several downsides to owning gold. First, its expensive. Spot gold closed above $1,300 an ounce in 2017. When you buy physical gold, there is an additional premium added to the spot price. A 1 ounce American Gold
Investing in gold via the stock market is relatively simple and straightforward. Unlike buying physical gold, security and storage are not a concern when buying the best gold stocks. In fact, some of the top gold stocks even outperform physical gold. You see, gold mining companies that operate efficiently are able to produce gold at significantly lower prices than spot gold. Since their operating expenses are rather stable, a spike in the price of gold should mean greater profits for the gold mining producer because they’re able to sell gold at a better price. As an investor you have several
Gold penny stocks are gold companies that trade under $5 per share and have a small market capitalization. These companies trade on stock exchanges like the Nasdaq (NASD) and New York Stock Exchange (NYSE). Some companies that don’t meet the listing qualifications for NASD or NYSE trade on the Pink Sheets or FINRA’s OTC Bulletin Board. To trade on the NASD or NYSE firms must adhere to certain financial, accounting, compliance and regulatory requirements. Some that don’t meet those requirements trade on the OTC Markets. However, the best gold penny stocks release financial disclosures and other important information that investors
Gold mining companies are generally categorized in two groups. Senior and junior miners. A senior mining gold company has an established revenue stream from producing gold. The company may even have a strong enough balance sheet where it’s able to distribute a dividend to its investors. These gold stocks are in the process of growing reserves and increasing production. A junior mining company is one that generates a small or no revenue from the production of gold. The focus for them is exploring and trying to find deposits of gold. They may own rights to a property but have yet
How To Invest In Silver Investors look to precious metals typically as a store of value. Investors have been buying precious metals for years as a hedge against currency exposure, and other interest rate sensitive instruments. Still others invest in precious metals for speculative purposes. The focus here is on silver, and describing silver investments and why some investors choose this precious metal over gold. Silver is used produce industrial goods and equipment, and once was used U.S. currency. This might seem obvious as first, but it holds a deeper meaning. Silver has value- it can be used in day-to-day
Investors today can seek to express ideas on the silver market through a number of different channels. One way used includes buying physical silver such as coins or bars. The futures market also offers liquid options for investors to take part in the movement of silver prices. Alternatively, investors look to buy and sell silver stocks for various reasons, most noticeably risk mitigation, ease of execution, and ability to track silver prices over the long term. Buying physical silver requires additional labor such as a transaction cost or matching counterparties. On the other hand, silver futures trading requires active management,
Gaining exposure to the gold market has never been easier. Investors are left with a bevy of choices. You can invest in: gold mining stocks, gold bullion and coins, and gold futures contracts. However, the easiest and most convenient way to gain access to the gold market is through Gold ETFs. An ETF or exchange traded fund has similarities to a managed futures fund as well as security that trades on the stock market. You see, an ETF trades just like a stock. But they are not companies, instead they invest in the underlying asset, just like a managed futures