Gold Mutual Funds Check The Gold Mutual Funds Performance

Posted on Mar 14, 2011 in Gold Mutual Funds | 0 comments

Gold mutual funds are mutual funds that specialize in buying stocks in companies that focus on gold, either mining companies or companies that make their products out of gold. Sometimes, they also buy the actual gold bricks, but believe it or not, that is actually kind of rare, most of the time they invest in mining companies.

This can cause problems for people who haven’t bothered to educate themselves about what to expect from the mutual funds performance. They see the price of gold just keeps going up yet their mutual fund is not and they get confused and angry.

The thing that they haven’t learned or considered is that if your mutual fund invests in a gold mine in a third world country, for example, and something happens that shuts down the mine short-term, or forever, it will greatly affect the value of the fund.

Let’s say that the fund you’ve purchased owns stocks in a big mining operation. This mine is cranking out gold on a steady basis but all of a sudden there is a mudslide that makes it impossible for the mine to operate. Your fund will reflect that loss even though the price of gold itself will still be going up. (Remember, there are a lot of mines all around the world, and “yours” was the only one affected).

Now, of course, this is an extreme example, but it is important to note that with most gold mutual funds you are not actually buying gold, you are investing in companies that produce the gold or product products made of gold, there can be a difference.

There are funds that do actually invest in gold. The gold bars will be held securely, usually in a bank. You own your share of the gold but you don’t actually take possession of it.

If you want, you can actually have real gold bars as your investment. Of course, this can be extremely cumbersome and potentially dangerous if people know about your gold. You will need to be able to keep a secret if this is the path you choose.

If you are a small investor and can only afford a small number of gold bars, this can be a fun way to invest in gold. But if you are investing a lot you don’t want to have to deal with the hassle of pricing, buying and storing the gold. It’s also not the most liquid way of investing in gold.

Gold bars can be hard to sell. It’s usually much easier to move in and out of gold mutual funds than to invest in “real” gold. Just go online and start investigating the mutual funds performance before you actually buy.

Now more than ever, with today’s uncertain market, investing in gold mutual funds is a good alternative. It can help you protect yourself against the falling dollar and allow you to have more stability in your portfolio. Just be careful of only investing in the best mutual funds and educating yourself.

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