Why Invest in Gold?

Many investors look to gold as a way to protect their wealth in times of instability in the world. Gold is seen as a shelter against terrorist attacks, war, natural disasters and similar calamitous events. Other investors consider gold to be a hedge or shield for themselves and their families against the upheaval in the financial markets. The ongoing financial crisis that began in 2008 in the United States housing market has been a significant driver of gold investment. Still other buyers of gold are motivated by its rarity and appeal when crafted into jewellery and other objects of beauty.

Factors Influencing the Price of Gold

Gold is a commodity, and as such, its price is affected by the laws of supply and demand as well as by speculative buying and selling. Additionally, unlike most other commodities, gold is an object of hoarding. People’s decisions about when to save and when to sell their gold holdings can have an influence on the price of gold.

How to Invest in Gold

There are multiple ways to invest in gold, including:

Exchange-traded products – These products, which include ETFs, ETNs and CEFs, have been available to investors since the early 2000s and are traded like shares on the major stock exchanges.

Certificates – Gold certificates allow gold investors to avoid the risks and costs associated with the transfer and storage of physical bullion, although they involve different risks and costs related to commissions, storage fees, and various types of credit risk.

Gold Bars – The most traditional way of investing in gold is to buying bullion gold bars.

Gold Coins – Due to their appearance and rarity, gold coins may have some value over the intrinsic value of the gold they contain,

Gold Jewellery – If you are contemplating investing in gold through the purchase of jewellery, keep in mind that the price typically reflects not just the intrinsic gold value, but also the factors such as workmanship, sentimental value and retail mark-up.

Investment in Gold Mining Companies – Another method of gaining exposure to the rising price of gold is to acquire stock gold mining companies. For many investors, this is the easiest, most flexible and most understandable approach.

How to Invest in Gold Mining Companies

Consider diversifying your investment among a number of gold mining companies. Look for large, established companies that you believe will provide stability to your portfolio, and look also at unknown junior mining companies that will keep things interesting and offer big upside potential. Investment in junior mining companies carries greater risk, so be sure to limit your total investment in these firms to an amount you can afford to lose.

How to Pick a Junior Mining Company

Success in all business sectors – and mining is no exception – requires strong management. The place to begin your due diligence is the leadership suite. Do the people running the company have experience. Do they understand the resources sector and have they held senior management responsibilities in the past? Of course, there’s a first time for everything, but the mining industry is so fraught with challenges that having been there done that is a major advantage and success factor.

Other important considerations:

The location of the mining property. Is it in a historic gold-producing region? Are there producing mines in the vicinity?

Local government stability and support. Your money could go down the drain if you invest in a company that ultimately falls under the control of a dictator.

Proven reserves. Have samples been collected? What do the assay results indicated? Do they suggest the mine site is a prospective address?

If you are planning to invest a portion of your savings into gold, you have your work cut out for yourself determine the best options for you. Hopefully, this document has started you on your journey.

We wish you good luck in your investing.

This brochure is courtesy of:

Strategic Mining Corporation
The Exchange Tower
130 King Street West, suite 1800
Toronto, Ontario M5X 1E3

Contacts:

Ken Baird, CEO and Director
Email: kbaird@strategicminingcorp.com

Todd Sterck
Director
Email: toddsterck@strategicminingcorp.com

JS Stewart
Director
Email: jsstew@strategicminingcorp.com