Gold stocks are a very simple way for an investor to be able to invest in the gold market. Gold stocks are shares of ownership in various gold industry companies. Companies that mine gold participate in the buying and selling of gold and companies that store gold are all members of the gold industry.
Gold industry stocks can be much more volatile than the actual price fluctuations of gold. This is because of all the variables associated with each company such as the amount of gold reserves of a particular mining company, the varying cost of production of each mine and the differences in management philosophy of the companies. For example if a gold mining company has a policy of “hedging” – agreeing to a price prior to producing the gold, it can either reap great windfalls or suffer severe losses depending upon the price of gold when delivered, as opposed to a company that sells the gold as it is produced.
To “simplify” the investment decision for an investor there are many different gold newsletters to choose from. These newsletters are published weekly, monthly or quarterly, may be free or subscription fee based. Each gold newsletter does offer their opinion on how the price of gold will perform and what the result will be for various segments of the gold industry.
The newsletters will provide information about the various gold companies, management philosophy, whether a company has a history of “selling forward” or hedging, price history of the companies’ shares as well as any recommendations concerning cheap gold stocks. These ‘look forwards” are based upon the authors’ opinions and will always carry a disclaimer stating that the they are not giving investment advice but providing information and opinion.
A gold newsletter can broaden the knowledge and provide insight for a new investor or seasoned veteran.