Is it time to get physical?
Good as gold? It depends
Investment in the precious metal requires some thought
The usual reason for buying gold is that it is a hedge against risk. However, not all gold investments are equal. A gold coin or a gold exchange traded fund (ETF) offers direct exposure to the gold price. A gold share brings additional exposure to risks such as market sentiment and social and environmental problems, for example silicosis claims and collapsing tailings dams. But an extra boost to share price performance can come from positive news like new gold discoveries, acquisitions, turnarounds or dividends. Unfortunately, for long periods gold shares can underperform the gold price, so are not suitable for highly risk-averse investors or those investing only for the short term. Identifying gold companies that can potentially outperform is a bit more challenging. They range from small, struggling companies like Central Rand Gold (whose shares performed spectacularly well for a few months, when Chinese companies were bidding to take over the company) to diversified and more consi...
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