I dont know how to start a new thread on here becuase Im a newbie to hotcopper but want to start a debate on gold stocks v gold bullion. In everyones opinion, from a risk mitigating perspective would it be better to purchase gold bullion bars or to hold an indirect interest in a gold company?
Return: In my opinion, I would go with the gold dividend paying company in its growth stage becuase you have greater return for risk trade-off via the dividend payment and capital gains potential.
Risk: Both hold degrees of systematic risk however only shares have non-systematic risk, yet this can be diversified though holding optimally more than 8 targeted stocks.
Decision: Gold equities becuase at the end of the day if the price of gold goes up 10 dollars and the U.S market goes down 1%, it is likely that you will see gold stocks hit the least hardest. On the swing side, if both gold and the U.S go up then gold stocks will most likely outperform others. Overall gold seems like a viable investment with a lot of room to move. Technically some might call gold in a bullish phase but when you consider the health factor of the U.S economy, gold seems like a very viable investment.
I would love to hear other opinions and feedback..
