When comparing the performance of various investments over the past ten years, it is evident why we should remain focused on investing in gold mining stocks.

The Best Gold Mining Stocks Index

A good measure of gold mining stocks is the Amex Gold BUGS (Basket of Unhedged Gold Stocks) Index [AMEX: HUI].

The HUI Gold Bugs Index is a modified, equal-dollar weighted index of gold mining stocks. The index was designed to provide significant exposure to movements in gold mining stocks by including companies that do not hedge their gold production beyond 1.5 years. The AMEX Gold BUGS Index currently consists of 15 of the largest and most widely-held public gold mining stocks.

AMEX Gold BUGS Index

Source: NYSE Euronext

Over the past ten years, this basket of gold mining stocks has outperformed every major equity index and commodity in the world.

Gold Mining Stocks Outperform Most Assets over Ten Years

The HUI Gold Bugs Index has returned a solid 347% for the decade, while the Dow Jones, S&P 500, and the NASDAQ all show a significant loss.

Even when compared to physical commodities, which have done very well during this bull market, gold mining stocks outperform. Gold and oil have experienced a respective 206% and 270% price increase in the last ten years, while the HUI Index is up nearly 350%.

Source: Union Securities Ltd.

So despite all that we have had to endure in terms of volatility during the tenure of the current financial crisis, the clear winners over the past decade have been gold mining stocks. This clearly validates the investment strategy of both Gold World and my Mining Speculator newsletter.

And with all that is happening in the financial world, the amount of new investors in into gold and gold mining stocks will dwarf what we have seen thus far. In other words, get ready for the biggest moves in gold mining stocks over the next two years, particularly in 2010 which I am starting to refer to as "The Year of Gold Mania."

However, and this is very important, we always need to remember to keep our passions in check.

Don't Forget to Take a Profit from Gold Mining Stocks

The great lesson that we need to take away from the current economic downturn is to take profits from our gold mining stocks when they are offered.

Over the next 24 months, I expect that there will be great periods when gold mining stocks perform exceptionally well. But we need to remember to take profits from gold mining stocks and not get caught up in the story and/or our own greed.

They are quite volatile by nature; and, like we have just experienced, investors can get crushed when downside takes hold. However, when the upside comes, and it will come again, remember to cash in. I simply cannot stress this enough.

Investing in Gold Mining Stocks in 2009

Gold mining stocks have been hit hard over the past several months. However, I believe that gold mining stocks will begin to disconnect from the money-losing performance of the general markets and head higher sometime in the latter part of 2009.

I expect this will be a set-up year for the mania stage of the gold bull market, which I see ultimately unfolding sometime in 2010. During this mania stage, I expect to see masses of investors pining to get any kind of exposure to gold. As this happens gold prices will begin their next ascent to another new high. This will be the best opportunity to take profits from gold mining stocks in the past ten years.

Gold mining stocks are where the biggest money is going to be made in the general gold bull market. The returns could be phenomenal and beyond the wildest imaginations of most investors. It may just be the greatest investment opportunity of a lifetime for those who take key positions now in gold mining stocks.

Good Investing,

Greg McCoach and the Gold World Research Team
Editor, Gold World
Investment Director, Mining Speculator

P.S. The opportunities in the gold market have already proven to be huge winners for readers of my Mining Speculator advisory service. As a matter of fact, in the past five years the Mining Speculator portfolio has seen an average gain of 212%! Most of these gains can be attributed to my picks in junior gold mining stocks, which, as we've just discussed, are getting ready to explode. And I'm expecting even bigger gains from the gold mining stocks in the Mining Speculator portfolio over the next 24 months. That means there's never been a better time to become a member of Mining Speculator and get in on the tips and information for which some people invest millions of dollars with hedge funds. Click here to find out how you can join me in the Mining Speculator for as little as $25.