Investing in Gold Stocks is Different than Investing in Actual Gold

All of you MUST have heard about the Gold Funds and Gold ETFs (Exchange Traded Funds). But very few people know that there is a huge difference between both of them. Gold Funds Invest primarily in the shares of the gold mining companies around the world. They don’t invest in the physical gold. While Gold ETF funds invest only in the physical gold and not in the shares of any gold mining companies.

So in the true sense, Gold Funds are the Equity funds (Sectoral funds) While Gold ETF are the funds which invest in Physical gold.

Now, What is the main difference between investing in gold stocks and investing in the real gold?

Well, Investing in gold stocks means investing in the gold mining company. This means that your investment will fluctuate according to the price of the share of that company and not according to the price of the actual gold. While if you invest the same amount of money in the physical gold than your that investment will fluctuate according to the price of the real gold.

Many people have a false belief that investing in gold stocks means they are investing in the physical gold. But well, this is not the true. Investing in gold stock means you are the equity investor and not the bullion investor. If you invest in physical or demat gold than and only you are the bullion investor otherwise you are the equity investor.