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| The 3 Best Gold Investments Today By Gold World Staff | Thursday, June 11th, 2009 Why is gold the most popular investment hedge against any economic, political, or social crises? Because it is self contained, liability free, and universally valued. Few other assets can compare. The 3 Best Ways to Invest in Gold Advertisement Are you Ready for Oil's Next Rally? Watching oil prices hover around $50 per barrel, do you really believe prices are heading anywhere but higher? The most important mistake an investor can make is to wait. And when the world economy begins to bounce back from this recession, there are going to be some serious gains to be made in rising oil and gas stocks. In fact, nearly all of these oil and gas investments have made double-digit gains during the last three months... perhaps it's time to check them out for yourself. Find out more about this opportunity. Investment #2: Gold ETFs (Exchange Traded Funds) If you're not comfortable owning and storing the physical metal, gold Exchange-Traded Funds (ETFs) are your next-best bet. Gold ETFs are special types of exchange-traded funds that track the spot price of gold and are traded on major stock exchanges such as New York, Paris, Zurich, Tokyo, and London. The main drawback is the management fee charged by the issuing company. On average, a commission of 0.4% is charged for trading in gold ETFs, in addition to an annual storage fee. U.S.-based transactions are a notable exception, where most brokers charge only a small fraction of this commission rate. Annual expenses such as storage, insurance, and management fees are charged by selling a small amount of the gold represented by each certificate— a process that gradually diminishes the value in each certificate. In some countries, gold ETFs represent a way to avoid the sales tax or VAT which would apply to physical gold coins and bars. In the United States, revenue from the sale of a gold ETF is treated as a sale of the underlying commodity. Thus, it's taxed at the 28% capital gains rate rather than the 15% long-term capital gains rate for non-collectibles. Investment #3: Gold Production Stocks These do not represent gold at all, but rather are shares in gold mining companies. If the gold price rises, the profits of the gold mining company could be expected to rise. As a result, the share price may rise. However, there are many factors to take into account, and a rise in the price of gold will not always lead to a rise in the price of a share. Unlike gold bullion, which is regarded as a safe haven asset, unhedged gold shares and funds are considered to be higher risk, more volatile investments. This instability is a result of the inherent leverage in the mining sector. For example, if you own a share in a gold mine where the costs of production are $250 per ounce, and the price of gold is $750, the mine's profit margin will be $500. A 10% increase in spot gold prices to $825 per ounce will push that margin up to $575, which actually represents a 15% increase in the mine's profitability and a potential 15% increase in the share price. Conversely, a 10% fall in spot gold prices to $675 will decrease that margin to $425, which actually represents a 15% drop in the mine's profitability and a potential 15% decrease in the share price. The amplification of gold mining profits during periods of rising prices can cause a gold rush in mining exploration. In order to reduce this volatility, many gold mining companies hedge the gold price up to 18 months in advance. This provides the mining company and investor with less exposure to short-term gold price fluctuations, but reduces potential returns when the gold price is rising. Good Investing, Greg McCoach Editor's Note: The investments I've mentioned here are very safe positions against the US dollar. But if you're looking for a bit more upside, I've recently uncovered a new gold exploration company that's easily "one of the most compelling gold finds of the last 14 years." Find out more about this incredible gold discovery—and how you can start taking in its early profits—in my new report.
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Cashing in on HR 1's Greatest Asset Nobody hates pork more than I do, but buried within the hundreds of pages in the stimulus package, The Wealth Advisory Team has found an entire industry that's guaranteed to profit from it all - leaving early investors with giant-sized profits! In fact, out of that whopping $787 billion, roughly 10% of it will fall right into the laps of the chemical sector, since it is an industry that literally ties into everything we use all the time. That's $78.7 billion guaranteed - by law - to an industry that has its fingers in literally everything we touch. That has left us on the doorstep of a Stimulus Goldmine that could easily double when all of that pork finds its home! To learn more about this exciting opportunity click here. Economic Releases for the week of Monday, June 8th, 2009: Jun 10 - Crude Inventories Jun 11 - Initial Claims Jun 11 - Retail Sale Jun 11 - Business Inventories Jun 12 - Import / Export Prices Jun 12 - Michigan Sentiment Brought to you by Wealth Daily From the Archives...Precious Metals Are Still Your Best Bet Against the Greenback2009-06-09 - Luke Burgess Chinese Monetary Gold Increases to 67 Billion Yuan 2009-06-08 - Luke Burgess Bearish Trends for this Metal 2009-06-04 - Alex Koyfman Northwestern Mutual Life Insurance Co. Holds $400 Million in Gold 2009-06-02 - Luke Burgess Brazil Draws Foreign Miners While Dissing the Dollar 2009-06-01 - Sam Hopkins | |||||||||
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The 3 Best Gold Investments Today
