Gold Mutual Funds
The Best Gold Investments For Your Portfolio 

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Gold Stocks

Gold stocks are a way of investing in gold for higher-risk investors.

Are gold stocks right for you?

When deciding on which form of gold investment fits our needs best, we take into account our risk profile and objectives as well as our ability to analyse the investment options available to us. If we are able to carry out an accurate analysis of an individual gold mining company, either by ourselves or through the services of a brokerage analyst, we can go directly to the stock exchange and purchase shares of gold stocks instead of a basket of companies as in a mutual fund or ETF. This will likely give us more control over our investment results because of the precise targeting but also take away the diversification that is built into an investment basket. This increases our risk profile but as with all investments, greater potential risk usually translates into higher potential returns. Individual stocks are therefore more suitable for high-risk investors.

Valuing gold stocks

As already discussed, investing in individual gold stocks (mainly from the markets of Australia, Canada and Johannesburg) and the baskets that own them (funds) are considered leveraged plays on gold because they have fixed costs that either add to or take away from investment results, increasing or decreasing profits as the case may be. The basic idea is that if a gold mine produces gold with more value than its fixed costs, that excess value is pure profit and the bigger the difference, the greater the leverage, both on the upside and the downside. Adding to this leverage is the other factor that funds don't account for--the individual Proven and Probable Reserves (P+P) of gold still under the ground that also go up in value with the increase in gold prices. One way of valuing gold mining stocks is by calculating the Market Cap per Production Ounce (Market Cap per P+P Oz.) by dividing a company's P+P by its market capitalization.

Yet another quirk in gold stocks is the fact that although they all produce exactly the same product--pure gold--the gold is valued differently depending on the company. This is because different companies have different cost structures and different risk profiles. For example, some mines may be in politically unstable areas subject to crime and terrorisism while other miners may be in a stable financial and ecomomic national climate that is not likely to see any production interruptions or criminal activity like looting and kidnapping for ransom.

Mining vs exploration stocks

There are two basic types of gold stocks--gold mining stock and gold exploration stocks. The former have steadier valuations because they are already producing gold and have a record of profits while the latter are far more speculative, although sophisticated new electronic exploration technologies are making the business of gold exploration significantly less hit-and-miss. Regardless, both types are inherently more risky than the general stock market because they are so undiversified. The flip side of course is that when things go their way, they offer more handsome returns than the general market.

Alternative precious metals

An alternative to keep in mind for your portfolio is that when the price of gold enters into an extended upswing or bull market as it has done recently, investors sometimes will look at precious metals alternatives like silver and platinum which may be relatively better values because they haven't gone up as much in price.


An important difference between gold stocks and gold funds however, are the dividends that are paid out as income by stocks which funds may not pay typically. This may make a difference if income is one of your investment objectives.

List of gold stocks

As a serious mutual fund investor, your should make it your responsibility to find out what the funds you own invest in, regardless of whether you bought them through a broker or purchased them yourself directly from the issuer. To help you in this regard, we provide a ready reference--here are some of the top gold stocks holdings in the gold mutual funds mentioned in this site:                            
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Agnico-Eagle Mines Ltd. (AEM)
AngloGold Ashanti Ltd. (AU)
Aquarius Platinum Ltd. (UK:AQP)
Barrick Gold Corp. (ABX)
BHP Billiton Ltd. (BHP)
Compania de Minas Buenaventura SA (BVN)
Centamin Egypt Ltd. (CELTF)
Centerra Gold Inc. (CA:CG)
Dundee Precious Metals Inc. (CA:DPM)
Eastern Platinum Ltd. (ELRFF)
Eldorado Gold Corp. (EGO)

Eramet (ERA)

Freeport McMoRan Copper & Gold Inc. (FCX)
Gold Fields Ltd. (GFI)
Goldcorp Inc. (GG)
Hecla Mining Co. (HL)

IAMgold Corp. (IAG)

Imerys (NK)

Impala Platinum Holdings Inc. (IMPUY)

Johnson Matthey PLC (JMAT)

kingsgate Consolidated Ltd. (KCN)
Kinross Gold Corp. (KGC)
Lihir Gold Ltd. (LIHRY)

Lluka Resources Ltd. (ILU)

Lonmin PLC (LMI)

Newcrest Mining Ltd. (NCMGY)
Newmont Mining Corp. (NEM)

Noble Group Ltd. (N21)

Northern Dynasty Minerals Ltd. (NAK)
Northgage Minerals Corp. (NXG)
Placer Dome (PDG)
Randgold Resources Ltd. (GOLD)
Red Back Mining Inc. (RBIFF)
Rio Tinto Group (RTP)
Royal Gold Inc. (RGLD)
Silver Wheaton Corp. (SLW)
Silvercorp Metals Inc. (SVM)

Sims Metal Management (SGM)

Yamana Gold Inc. (AUY)
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