Contrary to popular belief, investing in gold is not always about swimming in gold. If anything, there is a lot of patience involved, which causes many investors to look for other options. That said, gold is still among the most profitable precious metals out there, as long as you are patient and play your cards properly. Determining the best ways to make gold investments will require you to gain a great deal of knowledge regarding how you can make it a part of your portfolio.
What Makes Gold a Good Investment?
It is not secret that gold is among the most popular currency out there and it has been this way ever since its discovery. During the ancient times, gold was an incredibly alluring metal, mainly because of its fantastic luster. It was used for a wide range of things, which included legal tender to jewelry. In present day, the demand for gold is almost the same and you may be surprised to learn that close to fifty percent of the gold market goes towards jewelry.
The rest of the amount is usually divided in physical forms, banks and different industries. Some of the most common physical forms of gold include gold bars or coins. Because of this, investors usually consider gold a safe haven investment. After centuries, this precious metal’s value is almost the same, despite plenty of fluctuations over the years.
More often than not, gold’s value increases whenever the dollar’s value goes down. Choosing gold as your go to investment option is an excellent way to protect the money you have from inflation. Your gold investment will keep your money stable, especially when there is fluctuation in the markets. This precious metal is considered a currency investors can rely on whenever paper money loses its value all of a sudden.
One of the main reasons why gold is so stable is that its demand is often quite high. Extracting this metal can be quite difficult and it is often obtained with the help of mining. However, even when there is an economic downturn, individuals are often prepared to invest in gold. You may be surprised to learn that whenever panicked investors purchase gold, particularly when they are concerned about the economic situation, they tend to drive its price higher whenever the dollar falls.
Things like these gold an ideal investment that is not affected by the drastic shifts and fluctuations in the market.
Ways You Can Invest in Gold
Gold investing is rarely equal. This holds true even the market is relatively stable. If you are planning to invest in gold, but don’t know the right way, opting for the following investment strategies would be ideal, especially for beginners.
Physical Gold: The most common method people use for investing is gold is buying physical gold in the form of coins or bars.
Paper Gold: Also referred as gold ETF or gold exchange traded fund, paper gold is similar to mutual funds where one purchases gold stock from with the help of a broker to own non-physical gold shares. One can also buy paper gold as a part of IRA packages. This can be ideal for those searching for a budget friendly way to make gold investments or smoothen risks associated with other portions of a retirement account.
Gold IRA investments, however, can vary. Therefore, it would be best to talk to an advisor regarding whether you prefer your fund to contain an ETF option or physical gold.
Mining Stocks: You can also invest in a mining company to own gold. When you do so, the company does most of the work. By making use of a mutual fund or ETF, you can own a portion of an organization and possibly differentiate the metal you plan to invest in.
How to Buy Gold Coins
If having physical gold in your portfolio provides you comfort, it’s worth knowing that you are not alone. Why? Because this is arguably the most accessible and sought after ways to make gold investments. So, how does one go about purchasing gold coins to invest in? Well, the first thing to do would be to do extensive research.
There is no shortage of gold coins available in these days and they are easily accessible to most consumers from across the globe. Each coin is issued by different mints and includes different gold amounts within them. After determining where you intend to source the coins, you can technically buy them from online distributors. Like with many other investment opportunities, it would be best to educate yourself about the credibility and reputation of the person or store you are buying from.
In case you are not sure about where to invest gold coins or were looking for heftier options like bars, we may be able to help. Get in touch with us today and our experts can help kick start your gold investment journey, making sure you can begin without any doubts. With years of experience under out belt, we can assist you and provide reliable and secure investment strategies.
How to Use Gold in Your Investing Strategy
Much of what investors intend to achieve with their investments usually depends on the particular investment strategy they use. However, diversification is still important for those who are thinking about the right place to start investing. Remember, gold is far from being an alternative to other investment options.
Instead, it is a suitable addition for balancing your portfolio properly. Every method to invest in gold has its pros and cons and you must consider weighing the options out there for yourself. After that, you can make a well-informed decision and choose an investment strategy that caters to your specific needs.
Things like coins, bars or bullions are usually seen as the ideal way to own gold physically. Many even believe it is better than owning jewelry. Having ownership of gold in such forms gives you better security, but it comes with loads of markups and liquidating your asset will be much harder compared to other methods.
If you prefer assets that you can liquidate without taking too much time, opting for ETFs may be an ideal investment option. You can purchase gold in budget friendly amounts and trade them in the market. That being said, ETFs often require a great deal of middle management and it could be a higher risk for your investment. Additionally, the gold you own will be subject to more ups and downs compared to owning gold physically. You risk the chance of running into the same issues by choosing gold IRA.
What’s more, you will be directly responsible to ensure the IRA you have is authentic and the amount of control you want to have on your investment. It is also worth keeping in mind that gold IRAs often require particular expenses, which means that investors have to bear extra costs. These expenses include cash out costs, storage fees, custodian fees, retirement account setup charges etc. and they will make the investment cost higher than what you initially expected.
Knowing whether that will be within your budget is vital when thinking about opting for a gold IRA account. If the gold’s relative unproductivity does not seem to be enough, consider opting for gold mining stocks. Why? Because they are slightly aggressive and their profits are pretty decent. Some miners run a business, investors will notice the boost caused by increased production, along with various expansion related choices.
This also means that the stocks could appreciate quickly, something that isn’t possible with physical gold. That said, physical gold is still the safest and most reliable out there and there are certain downsides associated with gold mining stocks. For instance, in case the mining business faces challenges like most businesses, there is a good chance that your portfolio will be affected.
So, if you are looking for other investment alternatives, perhaps purchasing stock in royalty and streaming companies would be ideal. This could offer mining companies the cash to purchase gold. Investors can also opt for mutual funds as they can be helpful for owning portfolios of different mining companies and protect them from the fluctuations and swings caused by investing in just one mining company.
Choosing gold certificates could also be a suitable option for individuals searching for was to invest in gold. One of the biggest pros that this option has to offer is that you do not have to worry about housing the gold. Instead, you will be buying unallocated gold in the form of notes issued by the company owning gold.
The main downside with certificates is that they are only as reliable as the company dealing them. Therefore, if you find this route appealing, it would be best to determine whether the company dealing these certificates is legitimate.
It would be fair to say that gold will always be worth something. If the value of gold dips every once in a while, you can breathe easy knowing that the rest of your portfolio is most likely doing better. If you want to learn more about making balanced gold investments, we may be able to help. Our experts know the importance of lining up your investment strategy with your goals and can help make that happen. Get in touch with us and our team can help you determine the most suitable gold investment strategy.
