Know About Gold Stocks

Company Stocks Vs ETFs Vs Gold Mutual Funds

Here are some of the basic points about the different investment modes available.

Stocks in Gold mining companies – Gold is a natural resource which is dwindling every year, making it harder to find and mine this precious metal. Investing in stocks of gold mining companies is risky, but also comes with the allure of high rewards, with the ability of a company to find gold being crucial to your investment. Choosing a company with a good track record and debt should help you arrive on a decision.

Gold ETFs – These are units which represent physical gold, with each unit equivalent to 1 gram of gold (typically). There is lower risk in owning gold stocks in this format, with an option to trade the stocks in the market.

Gold Mutual Funds – These are designed for investors who do not wish to take risks or are confused about their investment option. Such mutual funds invest in companies which are involved in the production and distribution of gold, with a diverse portfolio minimising the risk. With professionals managing the fund, one gets expert help and input at every stage, albeit at an additional cost.

Things to remember before investing in gold stocks

Gold is not a cheap commodity and not playing your cards right could see you blow your hard earned money. Here are a few points which should be kept in mind if you intend to purchase gold stocks or already own them.

1. Choose the investment mode – As mentioned above, there are three popular options to invest in gold stocks, either directly in gold-mining companies, in gold ETFs or gold Mutual Funds. Each of these modes have their pros and cons and these should be kept in mind before spending your money.
2. Ask an advisor – It is possible to be overwhelmed while investing, which can hamper your investment choice. Availing the services of a financial advisor could cost you a little extra but they might help you get the best returns.
3. Keep yourself updated – It is imperative that you keep yourself abreast of daily happenings, ensuring you know everything about your investments on a given time.

Popular investment options in India

The Indian economy is booming, offering multiple options for investors to choose from. While the markets can be unpredictable, gold stocks have performed relatively well over time. Some of the popular ETFs and Gold mutual funds in the country are HDFC Gold ETF, SBI Gold Exchange Traded Scheme, UTI Gold Exchange Traded Fund, Quantum Gold Fund and Kotak Gold ETF, with many more options available.

Read More on Gold