How to Buy Gold

Video Transcript

"Are you convinced that gold is the investment for you in the years ahead? Hi this is Roger Groh at Groh Asset Management. Once you've made that decision the next thing to think about is how are you going to buy gold? Are you going to buy the metal, are you going to buy futures, are you going to buy stocks, or what are you going to do? Well let's talk about buying the metal first. For most small investors the easiest thing to do is to go to your local metal shop. They frequently will have rates though that are abusive and it may not be to your advantage to buy small amounts of gold and expect to make money there because the price that they pay you may be substantially different from the prices that you read about on websites or in newspapers. If you are buying futures as a more institutional type of investor you're going to get the best price of all. The problem is that that market is very sophisticated and those deals traditionally are made between companies and governments where the retail investor does not see the price and cannot participate in large deals like that because they're small. So for most people if they are going to be gold investors that means buying gold stock. If you elect to buy gold stock what should you look for? Probably the place to start for data on gold mining companies is with the Denver Gold Group. They have a website, dgg.com. It's not that the group is right or wrong it is that many gold companies from around the world give presentations and those presentations are archived on the website. You can go back and get a list and look at them to determine what the management team has done in the past and really what their plans are in the future. If you couple that with research coming from your favorite mining analyst at your local stock brokerage firm or bank and that would give you a pretty good picture on what they think that the management team is going to do at a gold mining company and also in the management team's own words what they plan to do. One last note, gold stocks tend to do really well during periods when inflation is picking up. They tend to do not so well when inflation is declining so it also pays to be very cognizant of where we are in the economic cycle. Hope that helps. I'm Roger Groh at Groh Asset Management and thank you very much for spending time with me."