Investors want to know how to invest in gold or silver bullion and who are wrangling over whether to invest in the metal itself or in gold and silver mining stocks should realize that they are two entirely separate asset classes. Gold bullion is money itself, a tangible asset with eternal value.

You own it for insurance against a collapsing financial and monetary system. The profit — and there certainly has been some great gains in the past decade — is gravy. You own gold and silver mining companies not for their eternal value they could go bankruptnot for insulation from the financial system they are financial assets which are affected by credit conditions and general market volatilitybut for their profit potential.

You take on more risks in owning gold mining stocks or silver mining stocks in exchange for what should be a larger upside if business and market conditions prove favorable to them. Precious metals mining stocks collect their profits based on the spread between mining costs and the value of the metal being dug out of the ground. In the past few years, investors in gold bullion have enjoyed outsized gains as compared to investors in precious metals stocks.

The above ratio makes that clear. Advocates of mining stocks often tout that gold stocks move with two to three times the magnitude of the price of gold.

Gold Bullion or Gold Mining Stocks? | Fox News

At times — particularly good times — that's been the case. But it's certainly not the rule! In fact, the mining sector has substantially lagged gold's performance in recent years. Stocks can lag due to:. When times get tough, the action in the gold and silver mining stocks can get quite ugly. These stocks are typically the most volatile area of the entire stock market. They are not for forex what is a lot size short-term risk averse.

They are for those who believe the potential long-term rewards are worth the risk.

Bullion functions better than the mining sector as a portfolio diversifier physical gold is less correlated with the stock and credit markets. Over the long-term, gold also performs better on a risk-adjusted basis karvy stock broking mumbai fort expected returns with a fraction of the volatilityas measured by the Sharpe ratio.

Owning mining stocks in was a gut-wrenching experience. Gold itself remained relatively strong during the panic, even managing to buy gold bullions or gold mine shares which one a modest annual gain for But even the best gold stocks got clobbered. Fortunately for those who avoided selling at washed-out levels and hung on for the ride, the HUI gained back in all of what it gave up in But sincemining stocks have again gotten employee stock option plan meaning as compared to bullion.

Also, when gold and silver stocks are being clobbered mercilessly, premiums on many types of commonplace gold and silver bullion products such as American Eagles generally soar. In a true panic that incites a run on the buy gold bullions or gold mine shares which one retail market, physical gold and silver coins, bars, and rounds will be the direct beneficiaries, not mining stocks or ETFs.

We're NOT against owning mining stocks per se. They how much money does an archaeologist make a week be a rewarding area in which to speculate during a precious metals bull market. But they are speculative!

Gold vs. Gold Stocks - Which is the Better Investment? | Gold Stock Bull

As such, they serve an entirely different purpose than the low-premium bullion products you can purchase through Money Metals Exchange.

As renowned precious metals mining stock analyst David Morganeditor of the Money, Metals, and Mining newsletter, advises his subscribers. Everyone should have some physical gold and silver to their name. For more information on how to invest in gold or how to invest in silver, be sure to tour this web site!

Stefan Gleason is President of Money Metals Exchange, the national precious metals company named "Dealer of the Year" in the United States by an independent global ratings group.

A graduate of the University of Florida, Gleason is a seasoned business leader, investor, political strategist, and grassroots activist.

Gleason has frequently appeared on national television networks such as CNN, FoxNews, and CNBC, and his writings have appeared in hundreds of publications such as the Wall Street Journal, TheStreet. Could Silver Be Winding Up for a Big Move? Animal Spirits Send Markets Higher Despite Less Dovish Fed.

Chat with a live agent. Opt-out at anytime, hassle free.

Enter your name and email to create an account. Email me a unique password.

Money Metals Exchange Precious Metals All Precious Metals Gold Silver Platinum Palladium Rhodium TODAY'S SPECIALS. IRAs Monthly Plan Referral Program Scholarship.

About Us Contact Us FAQs Education Center Price Alerts Precious Metals Charts Money Metals Insider Sell to Us Reporting. Live Help Register Sign In. Buy Precious Metals Silver Gold Platinum Palladium Rhodium Pre-Made Portfolios Today's Specials Other Items Investment Diamonds Survival-Goods.

Are you sure you want to empty the cart? Money Metals Exchange Precious Metals Education Center Gold Mining Stocks vs. Gold Mining Stocks vs. Physical Gold Bullion by Stefan Gleason. Do Gold Mining Stocks Outperform Gold Bullion Over Time? Silver Gold Platinum Palladium Today's Live Chart: Download this Free eBook: The Hidden Lies of "Rare" Coin Investing.

Enter your email address to access your free report Sign Up NOW to Receive These Great FREE Benefits: Enter Your Email Address