Gold Mining or Gold Bullion Stocks for 2009?

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"If the American dollar does fall from grace as we goldbugs suggest, then owning shares of a gold mining company will be a tremendous boon."

Given the massive amount of money being pumped into the global economic system, higher prices down the road are a given. It's possible that prices may fall in the short term, but no currency can withstand a determined onslaught by its own central bank and national government for long. I consider gold a no brainer in this environment. It's a store of value that does well both in inflationary times and, as we saw last year, in deflationary times.

The trader in me wants to make a leveraged play to make the most off of gold's bright future. Gold mining shares would seem an excellent play then. Not only do you get exposure to the gold market, but you get the benefits of stock ownership. Gold mining shares are a nice compromise in terms of investment philosophy. If the American dollar does fall from grace as we goldbugs suggest, then owning shares of a gold mining company will be a tremendous boon.

The theory of owning gold mining equities is pretty easy, but the reality can be rather treacherous. Should you choose an established company with a lot of reserves or a junior company that mainly has a lot of promising prospects? One is more dependable and the other has the potential to be far more rewarding. It's a similar discussion to blue chip versus tech stock debate we saw towards the end of last century.

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