During periods of crisis, investors often flee risky asset classes and invest in assets or commodities that they feel will hold value. Gold is a prime example.

Gold is relatively rare and it is respected across borders; therefore, unlike currencies, it is believed to hold its value over time. And gold's value isn't just speculation: Historic charts show that gold spiked from about $150 dollars an ounce in the mid-1970s to more than $1,600 an ounce in 2012. Clearly, this metal has proved its worth over time. The question is, what's the best way to invest in it? (Think the value of gold is unshakable? Read The Gold Standard Revisited to learn about its rise and fall.)
Investopedia Broker Guides: Enhance your trading with the tools from today's top online brokers.

Investing in Gold
While collecting jewelry with a high gold content or gold coins is the method preferred by some, there are downsides to consider. For example, there is the issue of finding a safe place to store such merchandise. Finding a buyer for a particular piece may also be difficult. Plus, there is sometimes a very big markup on certain pieces.

But there is an alternative for investors who want to gain exposure to gold: the stock market. Check out these five simple gold stock plays.


Company/ETF Market Capitalization
NovaGold Resources (NYSE:NG) 1.48B
IAMGOLD (NYSE:IAG) 4.38B
Eldorado Gold (NYSE:EGO) 8.71B
SPDR Gold Trust ETF (ARCA:GLD) 63.6B
iShares Gold Trust ETF (ARCA:IAU) 8.82B

The Risks
While gold has fared well in the past, there is no guarantee that it will do so in the future. Another important thing to understand is that the price of gold can fluctuate widely. In 1980, the price of gold had risen to about $850 an ounce, a huge increase given that just a couple of years prior it was trading under $200. But not too long after that spike, gold lost a bit of its luster, and the price floundered until 2005 when interest started to pick up again. As such, investors who purchased at or near the top of the market in the 1980s had to wait about 25 years to recoup their investments.

SEE: A Holistic Approach To Trading Gold

Bottom Line
Investors tend to flock to gold in times of market crisis. Widespread international acceptance and recognition of this circumstance makes it likely that this trend will continue in the future. Adding a little gold to your portfolio might help you mitigate risk; the five stocks presented here are a great starting point for your gold stock search.

SEE: Does It Still Pay To Invest In Gold?

Use the to trade the stocks mentioned in this stock analysis, risk free!

Related Articles
  1. Mutual Funds & ETFs

    ETFs Can Be Safe Investments, If Used Correctly

    Learn about how ETFs can be a safe investment option if you know which funds to choose, including the basics of both indexed and leveraged ETFs.
  2. Mutual Funds & ETFs

    The Top 5 Large Cap Core ETFs for 2016 (VUG, SPLV)

    Look out for these five ETFs in 2016, and learn why investors should closely watch how the Federal Reserve moves heading into the new year.
  3. Economics

    India: Why it Might Pay to Be Bullish Right Now

    Many investors are bullish on India for all the right reasons. Does it present an investing opportunity?
  4. Stock Analysis

    Analyzing Altria's Return on Equity (ROE) (MO)

    Learn about Altria Group's return on equity (ROE) and analyze net profit margin, asset turnover and financial leverage to determine what is causing its high ROE.
  5. Investing Basics

    Building My Portfolio with BlackRock ETFs and Mutual Funds (ITOT, IXUS)

    Find out how to construct the ideal investment portfolio utilizing BlackRock's tools, resources and its popular low-cost exchange-traded funds (ETFs).
  6. Stock Analysis

    The Top 5 Small Cap Gold Stocks for 2016 (KGC, SBGL)

    Learn about the factors that led to gold's underperformance, factors that may lead a gold rally and five micro-cap gold stocks to consider.
  7. Fundamental Analysis

    Performance Review: Commodities in 2015

    Learn how commodities took a big hit in 2015 with a huge variance in performances. Discover how the major commodities performed over the year.
  8. Stock Analysis

    The Top 5 Micro-Cap Gold Stocks for 2016 (PGLC)

    Discover five micro-cap gold miners that are well-positioned for a positive year in 2016, even if gold prices remain under pressure.
  9. Investing News

    Icahn's Bet on Cheniere Energy: Should You Follow?

    Investing legend Carl Icahn continues to lose money on Cheniere Energy, but he's increasing his stake. Should you follow his lead?
  10. Stock Analysis

    Analyzing Google's Return on Equity (ROE) (GOOGL)

    Learn about Alphabet's return on equity. How has its ROE changed over time, how does it compare to its peers and what factors are driving ROE for the company?
RELATED FAQS
  1. Should mutual funds be subject to more regulation?

    Mutual funds, when compared to other types of pooled investments such as hedge funds, have very strict regulations. In fact, ... Read Full Answer >>
  2. Do ETFs pay capital gains?

    Exchange-traded funds (ETFs) can generate capital gains that are transferred to shareholders, typically once a year, triggering ... Read Full Answer >>
  3. How do real estate hedge funds work?

    A hedge fund is a type of investment vehicle and business structure that aggregates capital from multiple investors and invests ... Read Full Answer >>
  4. Are Vanguard ETFs commission-free?

    While some Vanguard exchange-traded funds (ETFs) are available commission-free from third-party brokers, a large portion ... Read Full Answer >>
  5. Do Vanguard ETFs require a minimum investment?

    Vanguard completely waives any U.S. dollar minimum amounts to buy its exchange-traded funds (ETFs), and the minimum ETF investment ... Read Full Answer >>
  6. Can mutual fund expense ratios be negative?

    Mutual fund expense ratios cannot be negative. An expense ratio is the sum total of all fees charged by an asset management ... Read Full Answer >>
COMPANIES IN THIS ARTICLE
Trading Center