Properly Investing in Gold

Investing our hard earned money into anything is a bit scary, but investing it into a valuable resource sounds like a good idea right? Well, it can be a great idea when you understand how to invest properly. Most people want to rush out and put their money in silver, gold or platinum because they are valuable. If I were going to put my money in anything it would be gold, it’s a little more stable than silver and not as expensive as platinum. Here are a few valuable pointers on how to properly invest in gold.

Why Invest in Gold

Gold is a form of protection against inflation, currency debasement and global uncertainty. Gold will always be valuable whether it’s in money, jewelry or bullion. There will always be a value on it. Gold is also easily obtainable in its many forms. Gold is a precious metal that is mined across the world and valued by many as a status of power and richness.

How to Properly Invest

Gold Bullion

Buy gold physically at various prices. Purchasing gold coins, jewelry and bars is great way to get started. You won’t want to pay high premiums on the gold you buy. You will want to buy it pretty close to spot price. Spot price is the average purchase rate a person can expect to pay per ounce of gold. Coin dealers and jewelers will add a premium to the spot price because they are purchasing at or just below the spot price and they want to make money on it too.

To avoid getting ripped off when purchasing gold in bars, coins or bullion you will want to establish a solid reason why you want to invest in the first place. If you plan on making it a long-term investment then you will definitely want to buy gold at as close to spot price as possible. If you want to purchase gold to use as money then buying smaller gold coins is the better idea for you.

ETF’s

ETF’s are Gold Exchange Trade Funds, this is a popular way to have gold exposure in your portfolio without having to store the heavy metal. Gold EFT’s track the spot price of gold. They will store their gold bullion somewhere and give investors access to various different types of gold.

For each share of gold EFT you purchase, you essentially own about 1/10th ounce of gold. Owning EFT’s does not mean you actually own the precious metal, it just means you own shares in a piece of gold. With that being said often times EFT’s can be sold short so two people can own the same piece of gold.

Gold Miner Stocks

Investing in gold mining stocks is a riskier way to invest in gold, but it is still a popular option. Gold miners are risky because they trade with the broader equity market. If you go this route make sure that they have good management and inventory.

Don’t make the common mistake of buying small gold miners that are still in the exploratory stage. Buy into a well-established and growing gold miner. To be effective you also must purchase the right amount of stocks. Buy in increments of 10, and get a feeling for the miner that you are investing in before you invest largely.

Overall

Investing in anything is tricky. You have to know the ins and outs before hand or you could make a costly investment. Not all EFT’s, gold bullion or gold miner stocks are the same. Each one will have it’s own pros and cons. However if I were going to invest into gold, I would personally invest in the gold bullion. While the market maybe unstable, the piece of precious metal is more valuable than not communicating at all. I would just simply do my very own research, and find products that will be easily obtainable and be able to keep up with supply and demand.