Warren Buffett is one of those individuals everyone seems to pay attention to. As a known gold bug, he clearly favors precious metals over other investments. In Buffett’s opinion, now may be a good time to start buying gold stocks.
Warren Buffett Eyes Gold Companies
There is no denying that gold should be in every serious investor’s portfolio by now. Whether it is a small or big quantity, the precious metal will remain of great interest now, following the US elections, and into 2021. Especially with COVID-19 still wreaking havoc globally, demand for safe havens is likely to keep increasing.
When it comes to investing in gold, exploring the different market options is always worthwhile. More specifically, one can buy bullion directly, choose for unallocated or allocated storage, or explore company stock. According to Warren Buffett, now is the time to dive deeper into gold stocks.
Such advice is not entirely surprising either. Buffett has made significant investments in gold first through Berkshire Hathaway. Since that time, the stock price has increased by over 6%, validating this approach by Warren Buffett. He isn’t known for being a stock “flipper” either, lending some more credibility to this new advice.
It is also worth mentioning that investing in gold stocks yield a dividend for investors. Thanks to COVID-19 and other external factors, those dividends are virtually zero for most mining companies. Instead, one has to hope that stock prices rise in value over the coming months. That is never a guarantee by any means.
Not all Gold Stocks are Equal
Investing blindly in any market will spell trouble sooner or later. This applies as much to gold stocks as it does to anything else. It requires a lot of research to make the right decision. Following Warren Buffett without conducting any sort of background checks or comparisons is asking for trouble.
Given how there are still a lot of uncertainties worldwide, making big investments is not easy these days. However, it isn’t overly difficult to gauge the information one needs to make a decision either.
Warren Buffett is bullish on something he invested in himself, which is to be expected. Whether the rest of the world shares this outlook, is a different matter altogether.