May 17, 2010, 7:32 am

3 Different Ways To Invest in Gold

by: The Financial Blogger    Category: Investing Ideas,Investment, Market and Risk
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While the PIGS (Portugal, Ireland, Greece, Spain) are creating a big mess on the stock market (creating a mess; isn’t that what pigs are good at anyways, right?), the price of gold is soaring. While I still think that gold is not the perfect place to put your money over the long term, there is still a good opportunity for speculation.  You can invest in gold different ways without actually buying the  physical bars or certificates 😉

Gold Stocks

We Canadians are lucky  since we have several great gold producers available on our stock market. Buying gold producers is another way to benefit from the price of gold but also to count on solid management instead of pure speculation on the metal. However, you may consider selling gold producer once the price of gold has reach a peak.

Since gold producers will protect themselves against important gold price movements (through options and futures), you benefit from an additional protection if gold prices were to tumble.

Here are a few stock picks that could be interesting if you are looking for a promising gold producer (note: this is not a recommendation, just a stock trading idea 😉 ).

 

  • Capital Gold TSE – CGC
  • Semafo TSE – SMF
  • Eldorado Gold TSE – ELD
  • Alamos Gold TSE – AGI

Mutual funds

Another interesting way to diversify your risk while betting on gold is to buy gold oriented mutual funds. You will then benefit from the expertise and the knowledge from a team of portfolio managers who are looking at the price of gold on a daily basis. They may have a better chance to trade the right companies and also protect yourself from bigger losses if gold goes backwards:

  • BMG BullionFund
  • Sprott Gold Bar
  • Dynamic Strategic Gold

ETF

You don’t really want to hedge your risk and you definitely want to make a play on gold? Then you should buy ETFs. They offer great liquidity and your trading fees are much smaller than if you buy gold bars ;-). Here are 2 well known gold ETFs that you can trade:

  • Horizon BetaBro HBU
  • Claymore Gold Bullion CGL.UN

 

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Comments

There is of course another option: Pool accounts. It’s not a bad option if you just want to get in and out and not pay brokerage fees.

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