A gold mutual fund is a safe way to purchase and own gold stocks. It provides the investor with the opportunity to diversify between multiple gold stocks. The fund is managed by a professional, so the investor does not need to make any of the investment decisions.
Different funds have different investment methods, so there are a multitude of portfolio management styles from which an investor can choose. There is a gold mutual fund for the cautious investor, those who take risks, and everyone in between. The price of the mutual fund tends to move quicker, and in wider directions up and down, than the price of gold.
These funds can be purchased, exchanged, or sold on any day and do not present the liquidity or storage issues inherent in some other gold-related investments. Some funds have heavy holdings in gold bullion, while others contain a large amount of investments in gold mines. The sizes of the funds vary greatly, from those that represent million dollar companies to those with holdings valued at several billion dollars each.
In a gold mutual fund, the investor’s money is pooled with money from other investors and company shareholders. An investment advisor is appointed to manage the fund and make the investment decisions regarding which forms of gold to purchase and what companies to invest in, as well as when to sell these investments. A fund is less volatile when it contains more stocks and bonds, and therefore the risk of losing the money invested will be lessened.
The gold mutual fund is a great way for people to invest in gold stock without having to do a lot of research. The fund manager selects which stocks and bonds to purchase and manages the fund on a daily basis. The diversity inherent in these funds makes them less risky, therefore the potential to lose the money invested is lessened.