Paper Gold: Bad advice coming from Sprott Asset Management

Gold Investment - 26 September 2011

Eric Sprott's announcement that investors should shift away from gold bullion to gold stocks (gold shares or equities) has caused a stir in the market. Sprott, CEO of Sprott Asset Management, has put his case across rather eloquently and he is adamant regarding his stance on this matter.

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Invest in precious metals today! Contact us for details.

Sprott feels that investors who now invest in gold stocks will benefit more than those who have only gold bullion in their portfolios. Sprott announced that his company has migrated towards gold stocks as he anticipates that this trend will continue. Gold stocks trade at lower values and this will afford investors the ability to create wealth for themselves. However, we at Gold Investment are of the opinion that gold stocks are a form of paper gold and represent paper wealth at best. We all know how easily paper profits can be wiped off the table while gold bullion (physical gold) remains no matter what the market does.

Invest in precious metals today! Contact us for details.

Invest in precious metals today! Contact us for details.

It is a fact that the HUI Gold Index hit an all-time high as it soared past 600. While the holders of gold stocks will be happy about this, certain quarters believe that this is still disappointing. Gold has doubled in value since 2008 and gold stocks have only increased by 22% within the same time frame. Questions are being asked as to why gold stock have not gone  from 500 to 1000 given that physical gold has doubled over the same period.

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