Investing in gold mining can be a smart way to make a lot of money, but it also comes with a certain degree of risk. Gold is a valuable commodity and its price rises when the economy is unstable or inflation is going up. However, the price of gold can also be volatile, so it is important to carefully consider the potential risks and rewards before investing in gold mining. Here’s some things to know before you dive in.
How To Invest in Gold Mining Stocks
One way to invest in gold mining is through the purchase of gold mining stocks. These stocks represent ownership in a gold mining company, and the value of the stock is directly linked to the performance of the company. If the company is successful in finding and extracting gold, the value of the stock is likely to increase depending on its profitability. However, if the company is not successful, the value of the stock may decline. Pretty standard stuff in investing, make sure to do research on what you believe to be the best gold mining stocks on the market. Learn about our top 5 gold mining stocks.
Gold Mining Mutual Funds or ETFs
Another way to invest in gold mining is through the purchase of gold mining mutual funds or exchange-traded funds (ETFs). These funds invest in a variety of gold mining companies, providing investors with exposure to the gold mining industry without the need to purchase individual stocks. This can be a good option for investors who are looking for diversification in their portfolio. Blackrock and VanEck have two very well known gold-mining ETFs.
It is also possible to invest in gold mining through the purchase of physical gold. Investors can buy gold bars or coins and hold onto them as a long-term investment. This can be a good option for investors who are looking to hedge against inflation or protect their wealth against economic uncertainty. This is the equivalent of buying bullion bars, which is physical gold.
Are Gold Mining Stocks Taxed as Collectible?
In the United States, gold mining stocks are generally taxed as collectibles if they are held for more than one year. Collectibles, which include items such as art, stamps, and coins, are taxed at a rate of 28% for federal income tax purposes. This is higher than the tax rate for most other types of investments, such as stocks and bonds, which are taxed at a rate of 15% or 20% depending on the individual’s tax bracket. You can avoid this by having gold in your Roth IRA.
Best Penny Stock Gold Mining Companies
There are gold mining penny stocks. Penny stocks are stocks that trade for less than $5 per share, and they are generally considered to be high-risk investments. Gold mining penny stocks are stocks of gold mining companies that trade for less than $5 per share. These stocks include Harmony Gold Mining, Galiano Gold, Paramount Gold Nevada, Platinum Group Metals Nevada, and Equinox Gold.
Canadian Gold Mining Companies
Canada is one of the world’s leading gold producers, and many of the world’s largest gold mining companies are based in Canada, including Barrick Gold, Kinross Gold, and Goldcorp. Canadian gold mining companies are active in all of the major gold-producing regions of the country, including Ontario, Quebec, British Columbia, and the territories.
Many of these companies also have operations and exploration activities in other countries around the world. The Canadian gold mining industry is a major contributor to the Canadian economy, providing jobs and economic activity in many communities across the country.
Our Take on Gold Mining Stocks
Regardless of the method chosen, it is important to do thorough research before investing in gold mining. This includes researching the company or fund that you are considering investing in, as well as understanding the risks and potential rewards of investing in gold mining. It is also important to consult with a financial advisor to determine if investing in gold mining is appropriate for your individual financial situation.
Investing in gold mining can naturally be a great investment, it’s an incredible way to diversify your investment portfolio and potentially protect your wealth against economic uncertainty.