Sprott Physical gold Trust ( PHYS) is a closed-end trust investing in fully allocated London Good Delivery gold bars -- no derivatives, gold certificates or other instruments. SPDR Gold Trust ( GLD) is the largest physically backed gold ETF in the world. Both these ETFs offer excellent exposure to the physical asset.

A second way of "holding" gold is through the large-cap mining companies such as Goldcorp ( GG).

Furthermore, these stocks are looking like a relative bargain. As the price of goal has fallen, these companies have also been subject to price pressure. Their profit margins are being squeezed, they are delaying projects, closing mines and cutting all costs possible in order to generate profits. Now may be an opportunity for investors to purchase a good long-term investment at a depreciated price.

It's important to note which stocks have a dividend component. Goldcorp suffered a loss in its second quarter. However, despite the headline number showing a $1.93 billion loss, in reality the company was able to produce adjusted operating cash flow of 48 cents a share -- more than enough to cover the $121 million in dividends the company paid. Its moves to delay capital spending will ensure the company stays profitable. It still has a healthy balance sheet and we see it as one of the fastest-growing, low-cost gold producers out there.

Gold, whether the physical asset or by proxy, should not be looked at as a short-term investment. If you can look past the volatile price swings, it could be just the long-term holding that balances your portfolio.

--Jason Mardinly co-wrote this report.

At the time of publication the authors had positions in PHYS, GLD and GG.

This article was written by an independent contributor, separate from TheStreet's regular news coverage.
Steve Cordasco is a principal at Cordasco Financial Network and host of CBS Radio's The Big Money Show, a weekly radio program on 1210 AM WPHT.

Cordasco has been helping investors reach their financial goals for over 20 years. A graduate of Temple University¿s Fox School of Business, where he earned a Bachelor's degree in finance and real estate, he is a Registered Investment Advisor and Registered Representative. He holds the Series 7, 63, 65 licenses along with an insurance license.

Barron's, a national financial newspaper, continues to rank Cordasco in the top 10 for Pennsylvania on its annual list of America¿s top financial advisors. Cordasco maintains strong ties to Temple University, where he is an associate professor in Temple¿s School of Engineering. He is also involved with charitable organizations including, Cooper Hospital Foundation, Christ the King Regional School Parish Council and School Board, Temple University Fox School of Business Investment Association.

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