Which is better, buying gold stock or bars/bullion?

Figure a middle-class man with average income. Please cite your sources! Thank you :-)

Public Comments

1. I would buy stock in a bar and then play cool music and pick up hot chicks!
2. They both have pros and cons; historically, the most leverage to gold is through gold mining stocks. However, one must be very very careful which mining company or companies they choose, if going with individual stocks. I would avoid many of the penny stocks or micro-cap mining companies which are too speculative and stick with quality names such as American Barrick (ABX) Newmont Mining (NEM), Rio Tinto (RTP) and BHP Billiton (BHP).
3. Middle class men should not invest in precious metals. Go back to college and invest in your own education.
4. Hey Just buy the "GLD" - it is an ETF that tracks the price of gold per ounce.
5. You can get both of them with a gold backed IRA. They offer regular IRA's with investments but then also have physical gold that hedges against inflation. I read about them in this Forbes article. http://www.forbes.com/prnewswire/feeds/prnewswire/2008/02/25/prnewswire200802252008PR_NEWS_USPR_____LAM147.html
6. It depends on your appetite for risk. If Gold continues to go up - then actually owning the stuff is the best investment. Traditionally Gold Producing companies have lagged the rise in the price of gold. So if you are a risk taker - actually own gold. If you are more conservative - invest in a gold producer - they go up less when gold rises - but go down less if it falls. Personal opinion - Gold should never comprise more that 5% of your total portfolio.
7. if you want to know that you actually own the gold, then buy the gold! otherwise, you assume the risk of the gold mining company. you also didn't put "middle class" or "average income" into numbers, because they mean different things to different people. i'd only say that you should keep 10% of your net worth and convert 10% of your income into gold as your "golden anchor", or "wealth insurance".