Gold Mining Stocks
Many experts agree that investing in gold mine stocks is a wise decision because of gold’s inherent value, which never depreciates the way the dollar can.
In strict financial terms, the words “investment” and “speculation” are defined quite differently, and misunderstandings often occur. Investing in the stock market, for example, is actually considered speculation, because there is not a promise or guarantee of gains over time as in an investment. Speculative stocks, then, come with certain risks.
Gold mining stocks, however, can be a wise investment decision. Aristotle himself laid out four qualities of a good money: 1) it must be durable, 2) it must be portable, 3) it must be divisible, and 4) it must have intrinsic value—gold encompasses each of these characteristics.
Those interested in gold mine stocks will find that with adequate research, these speculative stocks can provide advantageous results. Because of their risky nature, it is imperative to thoroughly investigate any gold mine company you might take stock in. A few considerations are:
- Does the gold mining company tell you exactly where the mine is located?
- Do they inform potential investors of the gold content found in the mine? This can only be done after hundreds, or even thousands of samplings.
- Who are the people heading the project? Do they have success and experience in the industry?
- Does the company have proper SEC filings?
- What is the financial standing of the company?
- How does the company take the ecological and societal implications of mining into consideration?
To invest in gold mine stocks wisely, be sure that you get a solid answer to each of these questions.