Why should I buy physical gold vs. gold stocks?

If you’ve been in the investment space for a while, you’ve likely dabbled in stocks as well as physical gold. If that’s the case, you may have also realized that the investment space is changing greatly. It’s getting to the point now, where you might wonder if you should buy physical gold or gold stocks. That’s a legitimate concern, and this post will help you decide which is best.

The Pros and Cons of Physical Gold

Physical gold has been around for decades. It’s a metal used all around the world and was once the basis of the United States currency. This asset has even been used as currency itself in the past. Gold lent itself to these spaces as it can be physically held. Before the internet, such a shiny metal simply looked valuable, which is partly why we decided it was.

Holding your gold investment in your hands is a feeling like no other. But it also holds great benefit. For instance, you can actually handle it and see that the asset is stored securely. You can physically put it in a safe or bring it somewhere instead of relying on a stock to perform in ways you can’t control.

Physical gold is also used for jewelry and can be a sign of beauty or class. Gold rings and similar items are fantastic gifts for loved ones in your life, and it’s also a valuable form of storage for your investment. Of course, physical gold can also come in the form of coins alongside bars. Coins are generally easier to store, though they might not be as valuable as a full-sized bar.

This isn’t to mention that when gold stocks go down, the value of the metal itself often rises. It’s great to have that actual asset in your possession, rather than relying on a stock that’s somewhat tied to a metal.

That said, it’s worth noting that getting involved with and storing physical gold has its barriers. For one, you have to pay to store it. Gold isn’t something you can just keep under your pillow or in your couch. That storage can come at the cost of an expensive vault or paying a third-party monthly to do so. One is a direct cost, while the other is an ongoing one. It’s worth investing in protection for your assets, but how much you spend is up to you.

Also, the IRS doesn’t particularly like investors storing gold in their homes, as it’s harder for the group to track. They require you to buy via IRS-approved companies and IRAs, and some investors might not appreciate that surveillance. There are certainly unique pros and cons here, but how are they compared to gold stocks?

The Pros and Cons of Gold Stocks

Realistically, gold stocks are quite easy to invest in. You can simply buy them digitally, and there’s no reason to worry about storage or shipping, for instance. That, and gold stocks are as easily sold as they are bought. Physical gold has to be sold to a vendor that you not only must seek out but bring the metal to as well.

That, and you don’t have to insure your gold stocks. All you’re required to do is buy. However, some investors might not appreciate this. These holders might want the physical hold to protect their own way.

Also, gold stocks are more reliant on the stock market than the value of gold itself. If the price of the metal is rising, gold stocks don’t necessarily correlate with that. In fact, you could see a company go on strike or fail to produce gold even if the asset price is soaring. This causes you to miss out entirely, leaving your chance for profits entirely in the control of another group.

Inherently, that lack of control makes gold stocks a higher-risk investment – not exactly ideal for those looking to profit. It’s also hard to tell exactly what’s going on at some of the gold companies you may invest in. Maybe they’re poorly run or have previously unrealized problems. Those issues will eventually come to a head, and your dollar will fall victim to that.