3 ways to start considering gold investments

“The conventional narrative is that people ran to gold in the panic of the 2008-09 economic crash, and that the price eventually plummeted by 28 percent from the 2012 close – from $1,675 an ounce to about $1,200 in 2013 – but there was no context or national discussion as to what that really meant,” says William A. Storum, author of “Going for the Gold,” (www.goldandtax.com).

“What most in the media failed to emphasize was the fact that this drop was the first since the year 2000. Such a long-lasting bull run should not have been overlooked, and despite the 2013 setback, gold remains a valuable investment.”

The reasons to own gold have not changed, according to Storum, however, many consumers simply don’t know that there are many ways in which to invest in gold – not just owning the metal. On the following pages, Storum reviews those options. •  Along with coins and bars, a well-established way to invest in gold is to invest in the shares of a company that mines gold. As long as the price of gold increases, gold-mining firms are likely to show higher profits, which will increase their share prices. Gold producers are also valued on their production volume. Higher profits can generate ample dividends to investors, but lower gold prices or other circumstances, such as unrest in a host country, for example, can result in losses. So, investing in mining stocks and funds is, in many respects, like any other stock market investment. Many gold mining stocks are publicly traded, and several mutual funds hold a diverse collection of these stocks. Stocks and funds rate high for convenience and profit potential, but investors are exposed to market swings.