Gold and Silver Stocks

Gold and silver stocks have gathered mixed reviews from economists, stock brokers, and gold brokers alike, and much of the controversy over these relatively new investment avenues has to due with the allocation or non-allocation of physical gold backing the paper certificates. It’s easy to see that a physical precious metal investment outweighs gold and silver stocks in terms of an insurance plan, because in a dire financial emergency gold will always hold value whereas a gold promissory note will not.

Gold and silver stocks increased, on average, 22% and 45% respectively in 2009, which is vastly better than a large number of other stocks and securities traded on the Dow Jones and the Nasdaq exchanges. However, some market analysts have warned that the bottom could fall out of gold and silver stocks if the companies issuing such notes fail to completely back their offerings with physical metals. Some gold and silver stock companies offer to deliver your metals to you in exchange for a transaction fee and shipping charges, so if you plan on purchasing precious metals for safety it makes more sense to purchase the metals outright from a physical gold and silver exchange.

In some cases, gold and silver stocks are not backed by a sufficient supply of metals, so audits of these types of companies could result in major losses of wealth for investors who are unknowingly holding gold in paper form only. While gold and silver stocks have profited almost as much as physical gold and silver throughout our recession, these investments are best reserved for those who simply want to track precious metals prices, and not those who are interested in solid bullet-proofing for their portfolio. 

Shannon King

Senior Staff Writer –

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