Investing in gold stocks vs. gold bullion is like traveling two roads with very different destinations. The road paved with gold stocks will, at best, lead to retirement portfolio stagnation. And at worst, it will lead to serious financial loss. The road paved with gold bullion will lead to financial safety, security, outstanding percentage gains, and a healthy retirement nest egg.
Why such different destinations for similar investments? Well, for starters, they aren’t as similar as you think. Stock market investing is based on emotion. Gold bullion investing is based on sound financial principles backed by thousands of years of past performance.
Think about it. If the world economy (or even just the USA) reached a financial tipping point, what would you rather own? Would you want gold mining stocks failing to prop up your dying portfolio? Or would you want physical gold bullion and bars? A currency that’s well-respected, highly sought after, and accepted around the world.
It seems like these questions answer themselves. But if you need further clarification we’ll provide it.
Stick around to discover the best way to hedge your portfolio. We’ll dive deeply to discover the differences between gold stocks and gold bullion. And we’ll remind you why one option is clearly the unanimous winner over the other.
Gold Stocks: The Unstable Gold Investment Choice
Some investors believe that investing in gold mining stocks is the quickest way to make large returns. In a way they are right. If you’re lucky enough to time the market perfectly you can make big bucks. You also have to choose the perfect company too. You have to find the best company with the best fundamentals that institutional investors have taken an interest in. Can you figure this out? Most people couldn’t.
Did you know that there are currently 123 gold mining stocks to pick from on the US stock markets? That’s not even including gold ETFs and other options. Finding the best stock that’s about to skyrocket in price is like trying to find a black cat in a coal mine. In other words, it won’t be easy.
Let’s look at two top performing gold mining stocks. These stocks are the best of the best in 2019. If you played the long game and invested in these companies here’s what would have happened:
AngloGold Ashanti (AU)
The following is the price per share of the stock AU on three consecutive points until most recently:
- 1/23/06 – $59.85
- 12/29/08 – $27.60
- 8/20/19 – $20.71 (market still open at the time of this writing)
Kirkland Lake Gold Ltd. (KL)
The following is the price per share of the stock KL on three consecutive points until most recently:
- 1/23/06 – $5.00
- 12/29/08 – $4.55
- 8/20/19 – $44.34 (market still open at the time of this writing)
As you can see, we have two very different scenarios here. Depending on which company you chose, you’d either have done very well or really hurt your retirement portfolio.
If you’re an astute investor and recognized economic uncertainty in 2006, you may have invested in gold mining stocks. Many look at this as a safe haven play. But is it really?
The tale of the ticker doesn’t lie. You could have made $39.34 per share over 13 plus years buying KL. Or you could have lost $39.14 per share buying AU during the same time period.
Are you savvy enough to pick the perfect stock at the right time? Even better, if you time the purchase right will you know when to sell to maximize your gains? 99.99999% couldn’t make this happen. And if you think you’re the exception to the rule think again.
Why Former Wall Street Wiz James Altucher Thinks Owning Stocks is a Sucker’s Bet
Who should you take investment advice from? Your stock broker or financial advisor? Remember, these guys and gals profit off of you whether you make money or not. Or should you trust former Wall Street maven James Altucher? He says you and every average Joe or Jane should never own stocks again.
Why does he feel this way? Well, he knows the way the markets work. And probably better than anyone else, he knows they’re designed to see the little guy fail and lose everything. In fact, here are some of his reasons to avoid the stock market like the plague:
- It’s really hard to pick stocks. Most of us pick the right stock at the wrong time and end up losing money.
- The competition wants you to fail miserably. That’s how they make their money. By buying hot stocks at the right time from suckers selling them at the wrong time.
- James says it’s a scam. Remember Enron? They were GAAP compliant until they went bankrupt. Their investors lost everything. The bigwigs went to jail or mysteriously died. If it can happen to them it can happen to you.
- Top investors make 10%-15% per year. Average investors are lucky if they make half that. Most people aren’t lucky.
As you can see, investing in gold stocks (or any stocks) is hard. Most people don’t win. Even worse, making bad investments can ruin your financial future. Don’t make this mistake.
Comparing Gold Bullion Prices to Current Top Performing Gold Stocks
Remember those two roads mentioned earlier? Well, here’s where the road less traveled would have taken you.
Gold Price Per Ounce
The following is the spot price of gold per troy ounce on three consecutive points until most recently:
- 1/23/06 – $558.50
- 12/29/08 – $881.00
- 8/20/19 – $1515.70 (market still open at the time of this writing)
If you look at the gold price chart over the last 15 years you’ll see a steady rise in price. During this time, gold reached its all-time high of $1917.90 per ounce before stabilizing in $1300-$1400 range for a while.
It’s the stability that makes this such a great investment. With the exception of 2011, you could have bought gold bullion at any time, held it, and made a tidy profit. Stocks and the stock market are volatile and unpredictable. It’s easy to lose money in that arena.
Gold Bullion: The Clear Winner
Through comparison alone, gold bullion is the clear winner over gold stocks. But it gets even better. The world is facing economic turmoil again. Gold tends to rise in value as a safe haven during tough economic times. Investing now could mean quick returns and big percentage gains before it levels off again.
The best way to buy gold bullion is through a gold IRA. Make sure to learn all you can about the best gold IRA companies and be sure to grab the FREE gold IRA investor’s kit from our #1 rated gold IRA company by clicking here.
Do you have any questions on the article or whether you should choose gold stocks or gold bullion for your retirement portfolio? Ask below!
Hmm, this is new because I have seen some people who are so eager to get themselves gold stocks but do not realise the dangers of losing iur in si much. So, I didn’t even know that it could be linked with being a scam. Thank ks to you, I know what to avoid now. Yes the demand for investing in gold has gone up and people are really putting a lot into it. Times are hard and economy is going down. Thanks for the offer in gold bullion. I’m sure it’ll be worth the try.
Hello Henderson! I’m glad my article was helpful to you and you know the difference between investing in the two. Let me know when you do decide to invest in gold bullion! That would be great to know and I will be able to help. Thank you for the encouraging comment!
Hi David. I’m very close to the retirement age so I have been looking for safe options to invest my money into. At least that portion I don’t intend spending in my retirement. I had looked into Gold stock and came to a similar conclusion to yourself.Purchasing gold stock sounds far to risky at my time of life. However, Gold bullion seems a far more secure alternative and something worth looking further into. However I had no idea how to start and who to start with. I will definitely be clicking on the link to ‘gold Ira’ that you provided. Thanks Jim
Hello Jim! I’m glad that you came across my article and that it supports the conclusion you made yourself. If you ever have any questions about how to invest in a gold IRA, feel free to look at the contents of my website or ask yourself! The most important part would be to invest in the right gold IRA company. But it’s best to do your due research first! Thank you for the encouraging comment, Jim!
This is a really worthwhile topic to write about. This is a really amazing review I must say. I have once thought about making a choice in either gold stocks or gold bullion and this has really been a hard task to carry out in my brain…I have also read books that check and balance their rates….this is a really amazing post I must confess…thanks for helping me understand more and posting this helpful review kudos!
Hello Willy! I am glad my post was helpful to you and you now know what investment decision to make! Thank you for the encouraging comment!
I find this article very informative and educative, while both types of assets help diversify your portfolio, they do so in different ways. You have made me realize the better option between them, Gold stocks are a riskier proposition by still being a paper asset, while gold bullion seem to be considered a stable investment that is ideal for retirement funds and long term profitability. Thanks for your recommendation on buying a GOLD IRA, this was indeed an eyeopener.
Hello SeunJeremiah! I’m glad that you found my article informative and educational! Thank you for the encouraging comment!
Wow, this isis one very nice post if not the best I’ve seen so far. I have had a double mind about investing in gold for quite some time now because of it non stability in the market over time. First seeing this post have given me some confidence an assurance to go into it and I’ve undoubtedly learned to manage my portfolio. Thanks for sharing this nice post.
Hello Dane! Indeed, gold is the best way to go but it’s best to do so in a gold IRA. I’m glad you liked my post! Thank you for dropping by!