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How to Invest in Gold, the Right Way

How to Invest in Gold, the Right Way

Due to economic changes, many people are leaning towards old means of investment. By looking at the 2008-2009 economic recession, we can clearly see why gold, in particular, has become a popular investment. At that time, the value of gold increased by around 25%, which is the reason why many perceive it as a safe investment in general. However, if you do not know much about gold, you may not know the best way to invest in it. Instead of making hasty decisions, you need to know how to make your investment profitable in the long run. If you have never invested in gold before, don’t worry because we’ve got you covered! 

Just check the following expert tips on how to invest in gold the right way.

Do your research

Before you get too excited and buy some gold bullions, you have to do your homework. First, write down all the questions you may have about gold, such as its current value, forms, and resale value. As expert investors state, your goal should be to thoroughly understand everything you want to know about gold, either by directly asking a professional or browsing the web for more information. This knowledge will be essential when you make decisions later on. Not only will doing some research spare you the headache of making unsound investments, but it will also prevent gold dealers from tricking you.

Avoid investing in jewelry

Buying an expensive set of gold jewelry might be tempting. Yet, if you plan on not wearing your jewelry and keeping it as an investment to resell it later, then we’re sorry to tell you that you’ve got the wrong idea here. The resale value of gold considerably decreases once you buy it unless it is 24 karats. Even if the jewelry is made from pure gold, you will not be able to get its full value back when you resell it. So, unless you just want to own a beautiful gold necklace and do not plan on reselling it, steer away from investing in jewelry. 

Consider other forms of gold

So, jewelry is a no-no, but what if you still want to own physical gold? Well, you should consider investing in gold coins, bullions, and bars instead because they tend to hold their value. Nonetheless, when you do resell them, dealers may offer a lower price than the actual market price because they’ll want to get some kind of profit as well. Another thing you might want to consider if you plan on investing in physical gold is how you’re going to store it. Keeping thousands of dollars’ worth of gold in your house is definitely not smart because you will make your home a magnet for burglars. Thus, you may want to rent a safe deposit box, which is a service offered by most banks, but it will cost you a pretty penny!

Consider other forms of gold

Gold IRA 

Unknown to many, people can now invest in gold for their retirement. The fact that gold does not lose value makes Individual Retirement Accounts ideal for people to invest in for their golden years who want to stop working and just spend their time relaxing in sandy beaches. However, not a lot of retirement planners would advise it as they won’t be making any money if you opt for it. The best way to go about it is to find a reputable company that offers this type of investment. Learning from them firsthand how the process works will take away all your worries if you are in doubt if it’s right for you or not. 

Buy Gold ETFs

Gold ETFs, exchange-traded funds, can be a great way to invest in gold without having to deal with the hassle of storing physical gold. When you invest in an ETF, you essentially invest in gold-derivative contracts that have the same value of gold; however, this method does not allow you to own physical gold. Beginners who want to try their hand at investing in gold should go for ETFs because they are easier to manage than physical gold. Similarly, seasoned investors can benefit from ETFs as well if their portfolios include assets that are dependent on the dollar’s value. Investing in ETFs, in this case, can help mitigate the risk.

Buy gold mining stocks

This is another fantastic way of investing in gold without owning physical bullions. Gold mining companies are dynamic, which means you can make impressive profits off of their stocks when the price of gold rises. Nevertheless, you should keep in mind that your profits are closely tied to the performance of the mining company you’ve invested in. Put simply, if the company suffers from decreased production or its workers suddenly decide to go on a strike, then you may lose a considerable sum of money. Therefore, in case you plan on investing in gold mining stocks, make sure that the company you will invest in is well-known to reduce the risk of losing money.

Investing in gold can help you improve your portfolio, especially if you are a beginner or have other risky assets. If you want to own physical gold, then avoid investing in jewelry and buy gold bullions instead. On the other hand, if you do not want to worry about storing your gold, investing in gold mining stocks or gold ETFs can be a good idea. For those wanting to secure their future, a Gold IRA may just be what you want to get into. Whenever in doubt, consult an expert—better safe than sorry!

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