Your Questions About Invest In Gold Stock

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Ken asks…

What are the pros and cons of investing in a global equity fund?

Is it safer to invest in an interest income fund? Which is more likely to provide higher returns? Which is better for short term gains?
These two are my only choices.

Justin answers:

Income trusts are great, just remember the taxes you have to pay on the dividends unless you have it set up in your rrsp. For the short term I would suggest possibly a basket of small cap oil & gas stocks. Also penny minning stocks, they are my favorite if you day trade these like copper, uranium, nickle, gold, silver, paladium, zinc to name a few. Canada is going to be the superpower for oil and gas, minning, and lumber. The world knows this and thats why the chinese and indian markets are are buying up shares of canadain companies. The economic growth with those two are massive. I say get a basket of small to medium term oil & gas stocks. Also look for consumer income trust that pay nice dividend like LIQ-UN.TO. I have only been investing for 2 years and have already made enough to go out and buy a house with mabye having a 5year mortage.

Daniel asks…

What is the best place to buy gold from and how much should I buy?

If the government keeps printing money is it safe to assume that gold will continue to rise? If so, how much should I acquire and where should I acquire it from?

Justin answers:

No it is not a safe bet to assume that gold will continue to rise. After each big run-up of gold prices in the past, as we have seen within the last 3 years, gold has come down and stayed in the doll-drums for years. I believe gold is in a bubble and is more likely to come crashing down than to reach the stratosphere. One of the biggest problems with gold investments is the fact that the dealer may mark up its price as much as 30-50% above the true value of gold. That said, two of the lowest mark-up gold dealers are referenced below. But be careful, I would NOT invest in this commodity (it is not money) at this time.

Http://www.apmex.com/Category/502/Gold.aspx?keyword=gold%20coins&utm_source=msn&utm_medium=ppc
http://www.discountgoldbrokers.com/
http://blogs.wsj.com/marketbeat/2010/11/10/heres-that-gold-versus-the-dow-chart-you-wanted/
http://www.stocks-for-beginners.com/gold-market-price.html

Chris asks…

How to invest in paper or electronic gold?

I am a newbie in this field. I just want to know that how can I invest in dis-invest in paper/electronic gold. How beneficial it is. What are the risks and possible gains, associated. Brief about the procedure.

Justin answers:

How? Open a brokerage account and buy the GLD paper ETF. Risk is the market volatility. Risk may be in the hands of politicians. If they resolve the world debt issues, gold would plummet.

Or buy physical gold at a reputable online outlet or coin shop. In this case, you need to be armed with the current market price. Apmex displays the current price on their website, along with their buy/sell price.

Http://www.apmex.com/
http://www.tulving.com/goldbull.html#silver
http://www.kitco.com/
http://www.goldprice.org/gold-price.html

Putting 5% of your portfolio in precious metals could be prudent, but as a primary investment vehicle, it has historically underperformed stocks.

Just type “invest in gold” in the Search Y! Answers box above and you’ll get lots of answers and ideas. The question is asked often here.

William asks…

when markets go down, do gold stocks go up or just gold itself?

when markets go down, do gold stocks go up or just gold itself?

Justin answers:

This is an excellent, and very important question if you are considering investing in either. I will try to the best of my ability to explain the price behaviors of both instruments.

1. Physical Gold/ETFs – The value of gold is measured in dollars, so the general direction of the gold price will depend on whether the dollar is getting stronger, or weaker. This, at the present time is hinged on the policies of the Federal Reserve Board. If Fed policies point to weakening or inflating the dollar, gold would benefit. Alternatively, if the Fed were to raise rates, gold’s value would be diminished.

The one time you should expect the price of gold to move in the opposite direction of the market would be in a time of financial shock. This is because people would be expecting a recession and poor earnings from companies, and at the same time, a loosening of Fed policy, which would bring on a weaker dollar.

2. Price behavior of gold miners – miners are different. Even though their earnings are directly tied to the price of gold, they often move with the market because the market has become a group of indexes that trade together, rather than a market of individual stocks which go any which way. Gold miners nearly always have their price move similarly as a group on a given day.

Over the long haul, the price of gold shares and gold have been fairly closely correlated, but at present, gold shares are way down, while the spot gold price is high.

Over an extended period, one can reasonably expect the price of gold mining shares to correlate with the direction of company earnings. As referenced above, gold miners are typically recording record earnings, and have very low price to earnings ratios on a historical basis.

The only direct advice I would give you is that if you want to buy gold miners, don’t buy the junior miners. They are extremely difficult to evaluate even for seasoned analysts, and giant mining companies seeking to buy them. Often times, what looks like a steal for you is an investment mirage.

John asks…

How can one survive a recession?

Should one get out of the stock market and stay with cash? or should one invest in gold?
I am clueless.

Justin answers:

Dont panick and pull… The stock market will bunce back it always does… If it doesnt we have problems far beyond money… However, having said that you should never put all your money in one place so make sure that you have a plan B in place

David asks…

How do people invest their hard earned money? Is there a website or something?

I am new to investing. There fore I am not really familiar with many things. But I want to invest soon. I have about $3,000. in the bank. How much should I invest? Also is there a website where people go and invest or do I have to walk into the company myself and invest ?

If Investing is about investing in the company that will give you the most returns, isn’t it easy just to invest in Let’s say Sony or Apple or HP .If i am completely off , why so? if not, what makes this investing trickier?

Justin answers:

The purpose of our investment is savings for our future
There is a risk element if we want to earn more interest / income so that our
investment will grow rapidly. But there is a risk factor also. So if you want to earn more
at short period you have to face risk also. The risk is attached with the type of investment
Bank deposit / investment in bonds etc – risk free
Investment in Gold / real estate – medium risk – income will be more
Investment in stock – high risk
requires good experience in selecting the stock.
Compound interest in bank deposit is better and risk free and having good liquidity
any time you can easily cash it.
Good books and financial magazines are available you may go through

Joseph asks…

What methods can be used to determine which stock sectors and which stocks in them are the best?

Since the best sectors and best stocks change I want to know how to find and track them. Anybody know?

Justin answers:

I recommend what I use:

1) Free – Stockcharts.com, marketcarpet, S&P sector (US mkt) and Fidelity funds (world mkts)……..I also pick leading stocks/funds representing different major sectors into sharpcharts interactive where you can plug in up to 10 on one screen, vary time horizons ie there you can see LA has broken out above the pack, and agriculture, gold, oil, nat gas all doing well.

2) Free – morningstar.com, markets, click morningstar indexes under sector deltas triangle, click sectors and industries for more detail cut.

3) Fee – Investors Business Daily – Sectors page (can’t be beat for technical + fundamental view), also, the best authority on the overall mkt which adds 75% weight to the equation. Read “The Successful Investor”…..do you know 80million people lost between 50% – 80% of their life savings in the 2000-2002 bear mkt, which most will never get back.
A drop of 50% means you need to gain 200% to get back to break even, and a lost of 80% means you’d need to gain back 500%. In my opinion both the book and investors.com are worth the money.

4) Hefty Fee – Dorseywright.com(advisor to big investment firms), the best technical view of sectors there is

Good Luck and Good Investing!

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