I told you yesterday why right now is the prime time to buy gold.
What I didn’t mention is that there are eight different ways to do that.
And some are much easier than others…
How to Own Gold Without Having to Work For It
When you want to own gold, the single most important thing to know is what kind of gold of you want. And as I mentioned, there are eight different ways people usually do this…
- Bullions (and jewelry)
- Certificates
- Futures
- Mining stocks
- Exchange traded funds (ETFs)
- Mutual funds
- Precious metal ETFs
- Pooled accounts
You’ve probably heard of a lot (or all) of these, but most people tend to buy gold bullions, trade gold futures, and invest in gold mutual funds
(I’ve got something special planned for you about this on June 14th, so stay tuned…).
And while these certainly give you the exposure you’re looking for, here’s the problem…
Even though buying tangible assets (like bullions and jewelery) lets you store gold yourself without having to pay anyone else to do it (storage fees, etc.), you still have to go through the trouble of putting it up for sale when you’re ready to do so. That means you’ll have to find a dealer or an online auction to sell it for you – and they’ll take a cut of your money for doing so. You could also hold your own private sale, but then you’d have all the work to do of drumming up your own interested buyers and actually selling it.
Trading gold futures, in my opinion, is a no. Period.
Futures are contracts that obligate you to buy or sell an asset (like gold) at a predetermined future date and price. Some call for the physical delivery of the asset while others get settled in cash. Trading futures is far more speculative than investing and is just not the smartest thing to consider doing. In fact, even seasoned futures traders will tell you is very difficult to do.
Investing in gold mutual funds is, by far, much safer than trading gold futures. But when it comes to mutual funds, you’ll want to keep in mind things like expense fees (investment or transnational), slower growth, and tax consequences. That means it could cost you a lot more to buy gold, take longer to “pay you back,” and Uncle Sam will still take a cut of your profit.
Now you could, instead, opt to just buy shares of stock in a company that’s actually directly involved with the exploration, mining, and accumulation of gold. Here’s a list of the metal mining companies I pulled using my proprietary tools:
One way you can sort through these to figure out which ones are the best to buy is by looking at the ones at or near their 52-week highs. You can also take the ones that haven’t quite hit their highs but have hit their key Fibonacci retracement levels that could act as support levels – which could be the price that locks buyers in and propels the stocks to new highs.
Here are the stocks from the list above that are sorted by percentage of their 52-week highs:
Of these stocks, though, only Hecla Mining (HL) is a more of a true gold stock. That means you’ll still need to do a bit of research and filtering to find the best gold stocks to buy.
But there’s a much, much easier way…
Instead of buying bullions, trading futures, investing in mutual funds, or sorting through gold stocks, you can trade what I like to call the “proverbial gold haystack” using ETFs. An ETF acts like a stock in that you can buy it, sell it, and even trade options on it.
And the easiest, most lucrative gold ETF to trade is SPDR Gold Trust (GLD), which tracks the price of gold. It’s a way for you to take advantage of the price action of gold – without all the work.
But it’s not the best way… You’ll hear about that from me soon.
Until then, have a great weekend!
Tom Gentile
