Why Should You Buy Gold Stocks?

One better way to get involved in the present bull market is by purchasing the shares of some gold mining companies. Few experienced investors feel that the holders of mining shares would reap great profits than the people who only buy bullion.

I will normally go with this view. However I will stress that the gold bullion should always be the foundation of a person's portfolio of the precious metals. Only after firmly establishing himself in the position of having gold bullion should one move further to buy gold shares.

My favorite mining company is the Goldcorp. Their flagship mine is in Canada, one of the most politically secure countries for investing in the natural resources. They also have many projects in the Chile, Mexico, the US and Canada, the mining friendly countries. The Goldcorp is being traded on NYSE and is very liquid, if we consider the mining stocks.

Hence if you are interested in the preservation of your principal investment, then go with the Goldcorp as it is the best bet in the mining companies. Moreover Goldcorp has been regularly paying the dividend each month for last many years.

Another mining company which has the potential is the Northern Dynasty. In the year 2002, it was a penny stock with each share costing $0.40. In the early 2008, its share was selling at around $13, why? Because Northern dynasty has made some big discoveries of the gold, copper, molybdenum in the Alaska region.

Currently there are some environmental obstacles and soon they would be sorted out and the company would start production. There is also a chance that Northern Dynasty might be purchased by a still bigger mining firm in the near future.

My concluding remarks here are in order. If you invest in the Goldcorp, you are sure of what you are getting. In case you've decided to bet on a mining company, please make sure that the bet you place is an educated one. Take only a little chance with your hard earned funds on any such speculative bet.

Michael has been writing articles online for 10 years. Check out his latest website Dutailier Nursing Chair which help people find more about gliding rocking chair.