Gold Stocks – How Worthy Are They?

If you are planning to invest in gold-backed stocks, then congratulations because you know that gold is a worthy investment option and you know the importance of precious metals in this world of fiat money.


But, is there a better way to invest in gold?  

Gold stocks are normally similar to other stocks, they have their own merits and demerits like normal stocks. But there are some really awful facts that make gold stocks not so desirable.

One serious thing you need to understand is that when you buy a gold stock, you actually do not own gold but you own the part of the company that trades that gold. This is a disturbing thing because the whole reason for investing in gold is to get more returns and to secure your wealth against financial downturns.

A gold stock’s value depends on various factors like company’s politics, its performance but the volatility in gold value has only a partial effect on it which is very depressing.

If you really want to own gold, then owning it physically makes more sense. There are options like opening an IRA and start keeping gold bars and coins in it for tax benefits and added financial securities. Gold IRAs yield more returns in the long-term compared to gold-backed stocks. You will also have the luxury of owning real gold in your name.

So, stop buying virtual gold on paper and start buying physical, real gold in the form of bars, coins, nuggets, jewels, etc…

How to buy physical gold?

People always get confused while buying physical assets like gold, silver etc.. But it is not a rocket science. Buying gold bullion is the best way to invest in gold due to several factors. Some might argue that buying gold in the form of jewellery is the best way, but as Jim Warren says, gold that isn’t pure is not worth investing. Investing in gold jewellery is not an ideal investment for two reasons – Quality and quantity. Not all the jewellery pieces out there are pure and investing on jewellers in bulk is not practical.

From where and how do I safely buy gold?

There are not too many ways of buying and storing gold bars. Let’s talk about some of the common ways people are allowed buy gold.

  •  Through banks

Yes, you can actually exchange your dollar bills for gold bars in some of the IRS-approved banks. But you have to open a special account to hold precious metals.

The problem with buying gold bars through banks is that you don’t get to choose where you can store your gold. In fact, there is no separate vault for an individual customer’s gold. Normally, all banks store their customers’ gold in their own vault and banks have the authority to pool your precious metal with other customers just like they do it with the cash. The problem with pooling or shared wealth is that you don’t get to withdraw your asset whenever you want.

  • Private gold companies

There is another way of buying gold in bulk, that is through an IRS-approved private dealer. There are gold companies in the US which directly sell gold bullion for currency. You can store that gold in whichever vault you choose. Just make sure that the vault is IRS-approved and backed by an insurance.

Let’s take an example of one company: Regal Assets, one of the top rated gold companies in the US sells gold throughout the country. Here is how it works, you can either register on their website or call them directly and place an order for your gold through a simple application. They will ship the gold to the given address. You can either let them keep up your gold in their own customer specified vault or you can rent a local vault and keep it there. It is as simple as that. Find out more in their gold investment kit for free of cost.

Right now, these are the only two safe ways to buy gold in bulk. If you want tax benefits on your gold then you can do it through a gold IRA. If you are not familiar with it, then read this article about gold IRA. There are local gold markets which are neither pure nor regulated. So, be careful when the local dealers offer you to store your gold in your own home which is not legal or safe.

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