Gold, as a physical asset, has for centuries been regarded as an asset that will hold its value over time. It’s relatively rare and its value is respected regardless of political borders. So gold ingots, bars, wafers, minted coins and jewelry with a high gold content have long been favored as safe havens for value. However, storing wealth in such a manner does have some difficulties. Safety and cost of storage are considerations and finding a buyer may be difficult, especially with jewelry and coins which may have high markups for reasons to do with aesthetics and rarity. The securities industry offers some alternatives. A simple way to use gold as part of your investing strategy is to buy units in an exchange-traded fund or ETF. A gold ETF does not, however, own any gold. Rather it holds derivative contracts that are backed by gold. Therefore the fund’s units reflect the changing price of gold. When you sell, you get cash, not gold.
There is another popular way to invest in gold through the stock market. There are many companies engaged in the exploration, mining and production of gold that offer their shares for sale on the stock market. However, the price of gold bullion, as it rises and falls, often has a levered effect on gold stocks. This means that the price of gold stocks is usually more volatile than the price of the underlying commodity. And while your gold stock’s corporate headquarters may be situated in a safe, stable country, its mines may be located abroad and exposed to the downside of some less developed jurisdictions around the world. You may find the price of your gold stock suddenly subjected to a sudden jump in costs, a drop in ore grades, strikes, expropriations, floods and so on. Or worse. Many Canadians will remember Bre-X Minerals Ltd., a company with headquarters in Calgary, that bought a property in the jungle near the Busang River in Borneo, Indonesia. Before the supposed discovery of gold was all exposed as a fraud, Bre-X’s capitalization grew to over $6 billion CAD in 1996. Its shares were soon worthless.
Investor's Digest of Canada •August 13, 2017 •
“Irrational exuberance” is how former US Fed chairman Alan Greenspan described the stock market during the dot-com bubble of the 1990s. Investor’s Digest of Canada columnist Edward Gardiner looks at Read More
Money Reporter •July 31, 2017 •
Cyclical investing works if the timing is right. The key question is: “Is this the right time?” Our current expansion (begun in 2009) is getting long in the tooth. Sectors Read More
Money Reporter •July 24, 2017 •
Rising interest rates have historically benefitted cyclical securities like mining stocks, fertilizer stocks and gold stocks. The Money Reporter picks a mutual fund with broad exposure to the sector, a Read More
The MoneyLetter •July 20, 2017 •
A recent MoneyLetter survey of published securities analysts’ reports on junior mining stocks found three precious metals penny mining stocks with interesting gold and silver prospects.
SilverCrest Metals Inc. (TSXV—SIL) has Read More
Investor's Digest of Canada •July 2, 2017 •
Technical analyst Brian Hoffman sets share price support levels for three mainstream blue chip stocks, gold and silver bullion, six precious metals stocks and a gold ETF during the traditionally Read More
The MoneyLetter •June 14, 2017 •
Many a gold stock’s headquarters are situated in a safe, stable country, but its mines may be located abroad and exposed to the downside of some less developed jurisdictions around Read More
The Investment Reporter •June 13, 2017 •
When you buy stocks in sectors and sub-sectors of the market, keep your portfolio balance goals in mind. If you’re a conservative, income-seeking investor, focus on utilities, financial and consumer Read More
Investor's Digest of Canada •June 11, 2017 •
Columnist Edward Gardiner looks at the uncertainties surrounding NAFTA negotiations, the U.S. budget and events in Europe. He’s encouraged enough to recommend holding pipelines, oil and gas stocks and automotive Read More
Money Reporter •June 6, 2017 •
Investors who want an equity portfolio that approximates the Toronto Stock Exchange will hold about a third of their portfolio in resource stocks. The further breakdown is: materials stocks (includes Read More
The Investment Reporter •May 23, 2017 •
The world’s largest gold mining company, Barrick Gold, earned much less than expected in the first quarter. That largely reflected less-than-expected gold production and higher-than-expected all-in sustaining costs. The company Read More
Investor's Digest of Canada •May 4, 2017 •
New Jersey Mining Company explores and develops gold, silver, and base metals properties in the Coeur d’Alene mining district of northern Idaho. Junior mining stock specialist Mike Kachanovsky says this Read More
The Investment Reporter •May 2, 2017 •
And six gold stocks to buy if you must. The price of gold appears to have stabilized. Lower producer costs raise profits. While you might hold a little gold to Read More
The MoneyLetter •April 19, 2017 •
When Canada’s real estate balloon starts to fizzle will it take Canadian financials stocks down with it? Behavioural finance analyst Ken Norquay recalls lessons of the past for readers of Read More
Investor's Digest of Canada •April 3, 2017 •
Stock markets keep rising as the precious metals miners’ rally pauses. Technical analyst Brian Hoffman warns that investors should watch support levels in an environment like this. He names three Read More
The MoneyLetter •March 8, 2017 •
Regular MoneyLetter columnist Ken Norquay is struggling to remain objective during the word war being waged by the U.S. media and their new president. As an investment advisor, his value Read More
Investor's Digest of Canada •February 20, 2017 •
Gold and gold mining stocks will benefit from the turbulence of the Trump presidency. And, analyst David Chapman writes in Investor’s Digest of Canada, the amount of new gold being Read More
Investor's Digest of Canada •January 24, 2017 •
Investor’s Digest technical analyst Brian Hoffman says trading in gold and silver mining stocks is likely to be quite volatile until it is clear where the precious metal prices head Read More
Investor's Digest of Canada •December 29, 2016 •
Mining stock Pan American Silver produces and sells silver, gold and base metals including copper, lead and zinc. It also engages in other mining-related activities, including exploration, extraction, processing, refining Read More
The MoneyLetter •December 1, 2016 •
Fear and loathing interferes with our good judgment. The MoneyLetter’s regular contributing columnist Ken Norquay applies lessons learned observing the recent U.S. presidential election to help us become objective investors.
What Read More
Investor's Digest of Canada •November 17, 2016 •
Pershing Gold is about to restart operations at its Relief Canyon project in the mining-friendly state of Nevada. Investor’s Digest mining columnist Mike Kachanovsky notes that the mineral resources at Read More
The MoneyLetter •October 26, 2016 •
Behavioural finance analyst Ken Norquay observes that investors love to read the financial news and study its impact on stock prices. But what should be more relevant for investors and Read More
Investor's Digest of Canada •October 17, 2016 •
Investor’s Digest of Canada technical analyst Brian Hoffman says rising wedge patterns have formed in the precious metals sector, the oil patch, financial companies and with broader market indexes. A Read More
The MoneyLetter •September 29, 2016 •
Robert ‘Bob’ Walkden, a long-time chairman of this company’s investment planning committee and its last remaining direct link to our founder George C. Armstrong, died this month. Bob spoke often Read More
Investor's Digest of Canada •September 14, 2016 •
The outcome of the U.S. election is making investors skittish. However, notes market observer Edward Gardiner, a Trump victory will precipitate a stock market disaster—but the price of gold will Read More
Investor's Digest of Canada •August 8, 2016 •
Major metrics indicate that gold stock Iamgold Corporation is a quality business with longer-term appeal. Iamgold is a Toronto-based international gold producer with operating mines on three continents. The company Read More
The Investment Reporter •August 1, 2016 •
Gold mining stock Centerra Gold has agreed to acquire Thompson Creek Metals. This may not be a text book example supporting the Theory of Complementary Needs, but each has at Read More
The MoneyLetter •July 19, 2016 •
With apologies to the “No Sex, Please—We’re British” playwrights, The MoneyLetter’s behavioural finance analyst Ken Norquay takes a look at why people make seemingly irrational decisions about investment strategy. His Read More
Investor's Digest of Canada •July 13, 2016 •
Voters in the United Kingdom have voted to leave the European Union. The U.S. Fed has signaled that U.S. interest rates will remain lower for longer, perhaps not rising until Read More
Investor's Digest of Canada •July 7, 2016 •
Markets have hit some resistance as the weather has warmed and seasonality is a likely catalyst for the correction. The S&P/TSX Composite Index has found resistance just above 14,000. Technical Read More
The Investment Reporter •June 23, 2016 •
When you buy stocks in sectors and sub-sectors of the market, keep your goals in mind. If you’re a conservative, income-seeking investor, focus on utilities, financial stocks and consumer stocks. Read More
Investor's Digest of Canada •May 18, 2016 •
Since the U.S. Federal Reserve’s 1913 creation, gold has retained its purchasing power while the U.S. dollar is worth 98.2 per cent less. Nick Barisheff, president and CEO of Markham, Read More
The MoneyLetter •May 11, 2016 •
Barrie, Ont.-based ValueTrend portfolio manager Keith Richards thinks so and he offers nine indicators as the evidence that convinced him to adopt a bearish market outlook and a defensive investment Read More
The Investment Reporter •May 5, 2016 •
The price of gold has recovered somewhat so far in 2016. While you might hold a little gold for diversification purposes, remember its disadvantages.
Gold has been trading above US$1,250 an Read More
The MoneyLetter •April 24, 2016 •
“…there are known knowns; …there are known unknowns; …there are also unknown unknowns.”–Donald Rumsfeld. “Don’t pretend to know the unknowable.”–Ken Norquay.
Behavioural finance strategist Ken Norquay is a frequent contributor to Read More
The MoneyLetter •March 27, 2016 •
Your best long term strategic investment plan is to balance your portfolio across the five main sectors of the economy: finance, utilities, consumer products and services, manufacturing and resources. Each Read More
The MoneyLetter •March 23, 2016 •
If you believe a continued market downtrend for the intermediate term is likely, then shorting the market with exchange traded funds, stocks, currencies and gold might be of interest to Read More
Investor's Digest of Canada •March 6, 2016 •
The tech stock favourites of the stock market have fallen back and precious metals and the companies that produce them may pull back after a brief rally. Toronto-based Brian Hoffman, Read More
Investor's Digest of Canada •December 2, 2015 •
John Embry, a Toronto-based senior market strategist with Sprott Asset Management, is appalled that, in just one week, bullion banks boosted their short positions by a staggering 35,000 contracts. One Read More
The Investment Reporter •November 10, 2015 •
The price of gold seems stuck at low levels with no recovery in sight. While you might hold some gold stocks for diversification purposes, remember gold’s drawbacks.
Gold trades at US$1,173 Read More
Investor's Digest of Canada •October 6, 2015 •
Alternative investments such as gold and silver bullion are stuck in a bear market that is still intact. So says Toronto-based Brian Hoffman, CPA, CA, a member of the Canadian Read More
Investor's Digest of Canada •August 19, 2015 •
Despite hand-wringing over America’s rising debt levels, U.S. markets continue to lead the world and the S&P 500 Composite Index has risen sharply over the past six years. Keith Richards, Read More
Investor's Digest of Canada •July 27, 2015 •
Headquartered in Toronto, Barrick is one of the world’s largest gold mining companies boasting operations in Canada, the U.S., Chile, Argentina, Zambia, Australia and Saudi Arabia. Jorge Beristain, a New Read More
Investor's Digest of Canada •June 21, 2015 •
The TSX Venture Exchange is not your father’s stock exchange. Elvis Picardo, vice president of research and portfolio manager at Global Securities Corp. in Vancouver, notes that instead of being Read More
Investor's Digest of Canada •May 21, 2015 •
Credit Suisse analyst Anita Soni rates gold company stock Agnico Eagle Mines as likely to “outperform” its peers and she has set a 12-month price target on this top gold Read More
Investor's Digest of Canada •May 15, 2015 •
Gold is an excellent electrical conductor—but copper does the job just as well and is a whole lot cheaper. Paul de Sousa, executive vice president of Bullion Management Group in Read More
Investor's Digest of Canada •April 24, 2015 •
Analysts surveyed by Investor’s Digest of Canada this month rated Goldcorp among the best gold stocks to invest in. Of the 11 analysts polled, nine rated this Vancouver-based company’s mining Read More
Investor's Digest of Canada •April 20, 2015 •
Remember all the talk a year or so ago how gold would take off? Well, guess what? It didn’t. In fact, it’s now trading at an even lower price. Keith Read More
Investor's Digest of Canada •April 3, 2015 •
Look to iShares CDN S&P/TSX Capped Financials Index Fund for a signal that Canadian stocks are due for a correction. When trying to gauge market outlook, financial stocks are a Read More
The MoneyLetter •March 27, 2015 •
There appears to be lots of cheer as the markets keep rising. But the 200-day moving average suggests this is a bear . . . in bull’s clothing. Understanding institutional Read More
Investor's Digest of Canada •March 9, 2015 •
Although cheap gas is great for motorists, it could wreak havoc with Canada’s energy sector, as well as the market for junk bonds.
Central banks throughout the West last year found Read More
The MoneyLetter •February 25, 2015 •
“As a technical analyst, I tend to avoid making longer-term predictions about markets, sectors or commodity prices. I find that forecasting market movements or events out beyond a few months Read More
Investor's Digest of Canada •January 23, 2015 •
Among U.S.-based mining companies that focus primarily on producing silver, Coeur Mining, Inc. (TSX—CDE; NYSE–CDE) is the largest. It is also a growing gold producer. As with other silver and Read More
