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Precious metals are, and have been, a better investment than mining stocks for many reasons.
While stocks have the capability of growing much faster and more drastically, they can also fall
just as easily or even easier, making them very high risk. On the other hand, owning precious
metals themselves will allow you to have a more stable investment that won't fluctuate as often.
The precious metals such as owning gold double eagles themselves might not have an
exponentially huge day, but they also won't plummet overnight.
By owning the physical product, you'll also have a 100% relation to the price movements. If
the price of gold rises, With stocks, you will base the price movements on how they affect only
your shares that are invested, leaving you with less money in the end. Mining stocks aren't bad,
but they also shouldn't be the only thing that you invest in. These stocks are generally split into
three categories, including conglomerates, junior exploration companies, and precious metals
Conglomerates are companies like AngloAmerican or BHP Billiton that don't have a particular
commodity that they depend on. None of these companies have U.S. or Canadian
headquarters. They are safe choices, but not for those who are looking to invest in gold or
silver alone, because they trade very low and aren't affected by the precious metals prices.
Junior exploration companies are ones that own undeveloped mines and properties that they
are attempting to grow or sell off, and they are a very small market that is traded on a thin
Often, these stocks can grow exponentially and then lose their value subsequently, making
them another bad choice for investing. Precious metals producers are the safest bet for
investing stocks because they deal specifically with precious metals. However, nothing will
replace the stability and investment that you'll make by owning precious metals themselves.
Gold and silver might be on the rise, but that doesn't necessarily mean that mining stocks are
any good to invest in. Generally, it's more of a crapshoot to invest in these companies, because
you might find a good one, but you'll often lose out more than you gain. If you are looking to
make a solid, stable investment that you can depend on regardless of the economy or anything
else, you should consider investing in the precious metals themselves by purchasing gold, silver,
or platinum in bars or coins for your own financial portfolio.
Is it Better to Own Mining Stocks
or the Precious Metal Itself?
Author: Alan LeStourgeon