Of course, you can profit from gold, too. And that’s why we recommend a three-pronged approach to investing in gold in this stage of The American Debt Crisis:
Invest in Gold, Part 1: Get Physical
Putting a portion of your savings in physical gold protects you from the song and dance of negative real interest rates, as the Fed devalues the dollar to help Washington manage its debt. Store your gold somewhere safe, and history has proven it should buy about as much when you take it out of storage as it did when you put it in – no matter what happens to the dollar between now and then.
For physical gold, we recommend most investors start with the most popular forms available: Eagles, Maple Leafs, and similarly mainstream bullion coins. They have established market value, and because they’re so widely known they should be easiest to sell if you ever need to do so.
In The Casey Report, we follow a select gold fund that allows you to buy gold from within your IRA and other retirement or investment accounts. This is quick and easy, so you can get invested in gold right away, to begin padding your portfolio against inflation. This type of fund shouldn’t be your only gold strategy, mind you – because there are many benefits to having the metal in hand when you need it. But it can be an important part of your gold holdings.
This investment has had a lot of upside recently – gold’s been on a ten-year winning streak that Casey readers have profited from tremendously. But that’s not the only reason to hold it in your portfolio. Think of a gold fund as an alternative place to stash your cash between investments – when you can’t stay ahead of inflation by holding cash in money market funds.
Invest in Gold, Part 3: Profit Opportunities
It’s one thing to invest in the metal itself – either directly by buying physical gold or by proxy through the gold funds. But the current gold bull market will also make a lot of people far wealthier by the time it’s done. The key is to invest in gold mining and exploration companies. Put very simply, if a company is able to produce gold at $400 per ounce which many do – and the price of gold goes from $800 to $1,600 or $2,600 per ounce, its profit goes through the roof. Share prices tend to follow in kind.
For investors who want to invest in this trend without maintaining an active portfolio of gold mining and exploration companies, there are a number of ETFs available. But even in a bull market there are downside risks, especially in smaller companies without active projects. Whether via direct investment or ETFs, you only want to invest in high-quality gold companies – and we have a favorite fund that will help you do just that.
No comments:
Post a Comment