Beginners Guide to Investing in Gold and GoldStocks

Beginners Guide to Investing in Gold and GoldStocks


Defining Terms:

Let’s define a few terms here that describe the different categories of gold investing. Like I mentioned above, there are several ways to invest in gold. 



Here is a short list, but it contains the ways most people invest in gold:

  1. Gold Bars – Bars that are professionally created and stamped or minted with weight and purity. Some “bars” are shaped like coins and are called gold medallions. If a government does not have a face value on a particular gold “coin-shaped” medallions they are legally not considered “coins.”
  2. Gold Coins – Legal tender issued by a government, even if that government is long gone. If a government issued it AND it has a “face value” it is considered a “coin.”
  3. Gold Bullion / Coin Accounts – Where gold bullion or coins are held on account and you never take delivery.  Ask yourself if you trust this holder? Are you protected if they company holding your gold goes bankrupt? Don’t believe what anybody tells you. Not all of these companies are created equal.  A less reputable company could conceivably sell the same bar over and over. What happens if they have a huge amount of their client holdings stolen? Be careful. Some big names don’t offer you the protection you might think they do. 
  4. Highly Advertised Gold Brokers Companies Selling Gold by Advertising Massively, and Taking Retail Orders by Phone or Online  (Bars, coins) – When you buy from the big name companies advertising on television, make sure you know what you are paying in comparison to the actual trading price for gold. 
  5. Gold Jewelry – If you are buying from a retail jewelry store, you are NOT investing in “gold.” You are buying something decorative that is priced for far more than the weight of the gold. 
  6. Gold Stocks – Listed gold stocks on the Nasdaq, NYSE and NYSE MKT (formerly the AMEX) are far better than gold penny stocks. Know the difference. 
  7. Higher Risk Gold Penny Stocks – Gold penny stocks are the highest risk way to invest in gold via the stock market. You have to know the difference between a producing gold company and a non-producing gold company. More on that later in this guide.
  8. Gold Mutual Funds – The typical mutual fund that had gold stocks in it. 
  9. Gold Exchange Traded Funds (ETF’s) – This is a gold mutual fund that has a full stock symbol and is traded like a regular stock. 
  10. Gold Exchange Traded Notes (ETN’s / Debt traded as funds) – These are debt instruments for gold companies traded like a regular stock. 
  11. Gold Futures / Options – This is buying gold for a later delivery date. Options essentially are priced in the same way and work in a similar way. You can also do options on an individual gold stock. 


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