Hi Alan,

You're correct! You buy gold to maintain the purchasing power of your currency; as a hedge against inflation, so to speak.

Gold stocks (particularly exploration and junior miners, of which I invest in) are pure speculation on a rising gold price. They are without a doubt the most risky and volatile stocks you can invest in. They're really one step above gambling. But you can tilt the odds in your favor if you know what to look for and how to analyze them. But buying gold bullion is the safest most secure way to play the sector.

Originally Posted by Alan Mendelson View Post
Canucknut you raise an interesting point about gold stocks. I always thought that the reason to buy gold was for the security that the bullion offered. Gold stocks lack that security. Gold stocks are companies that can be damaged by strikes, cave ins, inflation, regulation and as such do not offer the "security" that gold bullion by itself offers.

I'm not saying gold stocks are a poor investment choice, I just think that people who want security from gold should buy gold and not the miners. Your thoughts?