There are about two things in this world whose value will never depreciate: gold and land. Their prices may go stagnant for a while, but both will never go below their current market value.
However, between the two, gold tends to be a more accessible investment than land as the former can be sold in smaller pieces such as coins and pieces of jewelry.
Gold Investing 101
Investing in gold may be a great idea, yet there are many things to learn to properly and effectively navigate this arena.
It’s essential to know and learn about the basics to avoid risky situations such as fraud, theft, illegal reselling, and more.
If one is interested in becoming a gold investor, sites like learnaboutgold.com and other reliable sources online can significantly help. Look for platforms offering current news regarding gold investments as well as some tricks. For more input, here are some tips for gold investors:
8 Tips For Gold Investors
1. Buy Bullion
Buying bullion gives you access to raw gold. Buy one from a well-known gold dealer or government mint to make sure the bullion is real.
Make sure the gold is pure, especially when buying from unknown sources, and check if it’s minted by reputable manufacturers. Also, make sure to store it somewhere dry and safe to prevent any damages.
Furthermore, decide as to what you want to exchange the gold for. Ask for a buyback policy from the seller to protect yourself from other charges if you sell the gold back to the seller. A third party isn’t needed if the dealer is trusted, but it’s necessary if the source is unknown.
2. Invest In Exchange-Traded Funds (ETF)
ETFs are traded like the usual procedures in the stock market and represent assets through gold. People who invest in ETFs don’t physically have gold, but they’re comprised of small amounts of assets pertaining to gold.
ETFs are smaller investments than gold coins or gold bars, and they don’t need to be stored since you don’t have physical gold in your possession.
Buy ETF like a common stock. Search for gold trusts in the stock app you’re using, and it’ll display gold stocks for you to buy. Investing in ETF doesn’t need huge amounts of money, and the exposure would yield bigger risks.
3. Trade Gold Options
Selling or buying gold at a particular time and price isn’t required for trading, but if the stockholders know what they’re doing, options would become lower in the volatile nature of the stock market.
Gold futures enable you to secure investments or mitigate losses should you decide to do so, and on physical gold-based futures, you don’t need to store the possession until the terms of the contract ended.
The contract of your gold futures can be a long or short position. A temporary position is used if you decide to sell the gold and have it later at a more affordable price, while a long position is used if the gold is expected to rise in price and accept the gold delivery.
Choose the contracts if you want to have more leverage, flexibility, and financial integrity than you could obtain in having transactions through physical means.
4. Genuine Gold Certificates
Gold certificates represent gold value but not specified bullion. Owning this from a specific bank with physical gold means the bank owes a person the item but doesn’t own it.
Since, one doesn’t physically have the gold, the commercial bank can use it and just pay the person. If the bank declares bankruptcy, it loses the unallocated gold and the investor’s entire investment as well.
One can have gold certificates to physically own the item, and the company would be tasked to provide serial numbers for every gold bar. But there’ll be charges if one decides to put the gold in a bank vault.
Should the bank go down, one can take their allocated gold, given they have proof of ownership. Otherwise, the bank could have a hold on it.
5. Gold Jewelry As An Investment
When buying gold jewelry, conduct research since there are chances the pieces of jewelry are overpriced more than the actual value of the gold.
Look for private sellers preferring direct-purchase instead of an auction since auction prices usually appraise it at or above the value of the gold.
Gold jewel value depends on the purity of the gold. The highest purity is worth 24 karats equal to bullion, and the lower the purity, the lesser the value.
If one is fortunate and lucky enough, they might find pieces whose actual value is unknown to the private seller. This is why investing in gold assets is good and advantageous as it can make the rich richer in an instant.
6. Savings Only
As a general rule, one should never invest using credit as it’s very counterproductive and it might cause severe losses later on. Instead, invest using savings or money that’s not needed in the next five years. Investments aren’t meant to profit overnight.
It takes time to build up the earnings depending on the circumstance. Values may be affected by economic recessions, public health factors, and more, so it’s significant to allocate a proper budget not to be pulled out for the succeeding years.
7. Store Some In Safe And Nearby Places
Don’t surrender all the gold in a bank and in a place where property rights might be jeopardized. Moreover, store some of the gold somewhere close in case of emergencies and urgent transactions. Make sure these locations are safe and free from potential theft.
8. Be Compliant With The Law
Finally, follow the legalities. As much as possible, purchase and invest gold in government-accredited sources. At the end of the day, it’s better to be safe than sorry. Never go against the law to ensure proper transactions.
As much as gold investment has many benefits, there are also risks and challenges involved. However, they’d be nothing compared to the returns and profits should the investment be successful.
To know more and adequately prepare, learn more on how to invest in gold to ensure responsible actions in your portfolio.