So, in the long run, stocks appear to outperform gold by about 3 to 1, but over shorter time horizons, gold can win. However, there is no guarantee that the value of gold will rise. And stocks and bonds are generally considered better investments for retirement, as they have historically outpaced the rise in the price of gold over the long term. However, gold can be a safe investment when the economic outlook is not good, Cramer says.
Like other stock investments, gold stocks are almost entirely dependent on external factors, not just on the value of gold. Because gold stocks tend to mimic stock market trends, not the price of gold itself, your gold stocks can perform well even when the price of gold itself declines. Whether you're in an official gold IRA, in a safe, or in your home safe, your gold must be in a specific location. People looking to invest in gold usually have two options: investing in gold bars or gold stocks.
Therefore, if the stock market collapses, your investment in a mining company or gold manufacturer is likely to also be affected, while the price of physical gold will increase. Because gold stocks don't mimic the prices of gold bars, they provide less diversification to your investment portfolio. Yes, yes, gold prices have had their ups and downs, but in the long run, gold investors have been generously rewarded with that four-fold return rate. Gold stocks work in a similar way to traditional stocks, so you invest in a company that makes or mines gold.
The first is the VanEck Vectors Gold Miners ETF, known as GDX, a security that tracks the overall performance of gold mining companies.