Investing in Gold
For centuries, gold has been the world’s favorite currency. Today, it’s also a safe and stable investment alternative for investors looking to diversify their portfolios. It has also been a popular hedge against political unrest and inflation.
Whether you’re investing in gold to protect your wealth, to build a retirement fund or for something else entirely, you need to choose your investment strategy carefully. Generally speaking, an allocation of at least 10% should be allocated to gold in most portfolios.
Physical Gold
One of the most popular ways to invest in gold is through bullion, which is a type of physical gold that you can take home and store yourself. This option comes with a slightly higher premium than the spot price of gold on a commodities exchange, but it offers a level of comfort that investing in other ways doesn’t.
Bullion can be purchased from a number of different dealers, and many offer a variety of sizes and designs. However, they’re often more expensive than other types of investments, and you have to make sure you store the physical gold in a secure place.
Gold ETFs and Unit Trusts
If you’re not interested in buying physical gold, you may be able to get exposure to the gold market through an exchange-traded fund (ETF). These funds typically have a low cost and allow you to buy or sell shares of the ETF at any time.
Some of these ETFs are focused on physical gold bars, others on gold mining companies and still others on speculative futures contracts. The Gold IRA Comparison best way to decide on an investment method is to talk to your financial adviser about the various options available to you.
Gold Stocks and Funds
Investing in gold through stocks or mutual funds can be a great way to add this precious metal to your investment portfolio, but it can be risky. You can lose money if the company mismanages its operations or if the price of gold declines.
You can find some of these gold-focused stocks and funds on an exchange, but you’ll need to work with a brokerage firm to buy and sell them. Some brokers are more familiar with these funds than others, so you’ll want to do your research before making a decision on where to purchase them.
Gold Futures Contracts
Buying and selling gold futures is a bit more complicated than buying and selling stocks or ETFs, but it can be an excellent way to gain direct exposure to the gold market. These standardized contracts trade on organized exchanges and allow you to buy or sell a set amount of gold at a fixed price in the future.
Gold futures are more speculative than other forms of trading, so you’ll need to do your homework before purchasing them. Be sure to read the prospectus of any gold-focused ETF or unit trust you’re considering, and check out Benzinga’s Best Futures Brokers rankings to find the one that best fits your needs.
