Want to Invest in Gold? Here Are 4 Ways That You Can Do it
Gold is a traditional investment. It’s used in jewellery, industry and currency as it has universal value. It retains that value even if currency valuations plummet. These are the reasons why gold’s value shoots up in times of economic and political uncertainty. It is also a good choice for diversifying your portfolio since it is independent of the stock market. Do you want to invest in gold? Here are 4 ways you can do it.
Invest in Physical Gold Pieces
Gold has been used as money throughout history. This is why you can buy gold coins made in many different countries over the centuries. These coins are valuable for the gold within them as well as their history. You can also invest in physical gold bullion. This generally takes the form of gold bars or ingots. One point in favour of this strategy is that bar producers have to meet strict standards for manufacturing, labelling and record-keeping. There’s far less risk of being overcharged, as may happen when you buy gold jewellery or decorative gold coins found online.
Buying physical gold comes with other risks, too. For example, Australia won’t allow private investors to get their physical gold insured. That makes storing it at your home a very risky proposition, though it is understandable to want to have the gold stored nearby. If you do choose to personally hold it, either keep it in a safety deposit box or put it in a high quality, well-hidden safe.
Another tactic is storing the gold at the bullion dealer. This is the better choice if you are buying a large volume. They allocate their bullion bars to you personally or a percentage of their gold stores, and you can pull them out at any time. The storage fees for this may be lower than storing them in a safety deposit box. These services also make it easier to sell the gold to someone else.
Buy Gold Nuggets
Gold nuggets are one way you can invest in gold. Gold nuggets are available in a wide range of sizes and weights, giving you more options than standard gold coins and bars. You need to be careful so that you aren’t scammed, whether you get fool’s gold or simply overpay for the gold content. Services like Nuggets by Grant allow you to get real gold nuggets for sale online. Unusual nuggets may hold additional value because they’re considered collector’s items.
Invest in Gold ETFs
Gold ETFs or exchange-traded funds invest in gold in a variety of ways. They may buy and sell gold bullion, but you enjoy much more liquidity than trying to sell a gold bar in a hurry. Some ETFs take it to the next level by buying gold in foreign currencies; this allows you to invest in gold while enjoying a currency hedge. Gold ETFs may diversify their portfolio by investing in other precious metals, too.
They may also invest in mining companies and mining equipment manufacturers. This can result in dividends from the ETF, and that’s not possible when you’re holding onto the physical asset.
Buy Gold Mining Company Stocks
You can buy gold mining company stock directly. Their value is correlated to the value of gold. More importantly, the stock’s price is amplified by the swings in gold prices. This means gold mining company stocks soar higher than gold when gold prices rise, and they crash when gold prices go down. On the other hand, you don’t have to deal with physical gold, and the stocks may yield dividends in addition to capital gains. Buying stock in companies that are exploring new sites is very risky. The stock prices may skyrocket when they find gold, but many will fail to find gold, too.
Like all investments, gold has its advantages and disadvantages. However, gold holdings in any form are a great way to diversify your investment portfolio.
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