Learn How To Invest In Gold

 

Invest In Gold

Investing in gold is the action of expending/ laying out money for gold with the expectation of achieving a profit. When it comes to investing, the investors have to consider a number of factors such as, supply and demand and other available options in the market.

Investors can own gold through various ways like buying gold bars and coins, buying products made from the physical gold (which gives a different approach in agreeing to the gold price of the item) and also buying gold-linked products (such as gold mining stocks) that are directly related to the price of gold but do not include the ownership of the gold.

When it comes to investing, Exchange-traded funds makes investing in gold flexible and easy accessibility of the gold that can be bought and sold through shares.

REASONS WHY INVESTORS CHOOSE TO INVEST IN GOLD

• The gold-related investment products inhibit liquidity characteristics hence tend to be easy to buy and sell.
• Looking at a long-term chart of the price of gold, it is clear that even if gold has lost its peak, it’s still up substantially in the recent years.
• With gold being usually viewed as a “safe haven” by many in times of economic volatility, the gold at these times acts as a wealth preserver.
• When buying gold shares, the investor takes ownership of the small part of that company that will eventually grow and generate profits where the cash is returned to the investors through share dividends, or price growth or both.

DEMERITS OF INVESTING IN GOLD

• Gold is said to be marking time and while short-term traders may people may lose money.
• Gold has supply issues because there has never been enough to meet the demand from suppliers.
• The pricing of the gold shares usually lag on the way up when they have fallen way further down.

WAYS OF INVESTING IN GOLD

There are various ways of investing in gold that an investor can choose from. It’s up to the investor to make sure he/she gets the best professional advice before choosing which way to go. These ways include:

1. Direct ownership
One can own gold itself through buying gold mining stocks. This way the investor has control over his share of gold which is the real money knowing that the government has no control or change its value even though it can be slightly affected by forces of demand and supply. Its biggest disadvantage is the wide spread between ask prices and bidding. It also does not return profit fast but all in all it will be a very safe asset to own for holding value. One will buy at retail and wholesale in order to gain from the sale.

2. ETFs
An ETF is a type of mutual fund that trades on a stock exchange like an ordinary stock, there are 33 of them in the world that invest in gold. The first and the largest ETF is GLD. The reason why investors take advantage of holding gold through this kind of investment is liquidity where its normally substituted for currency. Risk in this case comes in in terms of holding the cash. ETF’s exact portfolio is fixed in advance and does not change.

3. GOLD STOCKS

This is investing in gold mining companies for potentially high profits but there is greater risk of loss in this kind of investment. Investors tend to go for this irrespective of the losses that incur for the benefit of the possibility of triple-digit gain. Here, the investors are usually advised to go for the strong production companies with reserved growth for good management and inventory support.

4. GOLD COINS AND JEWELRY
Investing in gold coins and jewelry is illiquid and one is usually at the risk of losing money in case one needs to sell at an inconvenient time. The gold coins can be purchased from banks, coin dealers, precious metal firms and jewelry from jewelry shops. The karat amounts in coins and jewelry, affects the price and durability of each piece.
gold. The first and the largest ETF is GLD. The reason why investors take advantage of holding gold through this kind of investment is liquidity where its normally substituted for currency. Risk in this case comes in in terms of holding the cash. ETF’s exact portfolio is fixed in advance and does not change.

3. GOLD STOCKS

This is investing in gold mining companies for potentially high profits but there is greater risk of loss in this kind of investment. Investors tend to go for this irrespective of the losses that incur for the benefit of the possibility of triple-digit gain. Here, the investors are usually advised to go for the strong production companies with reserved growth for good management and inventory support.

4. GOLD COINS AND JEWELRY
Investing in gold coins and jewelry is illiquid and one is usually at the risk of losing money in case one needs to sell at an inconvenient time. The gold coins can be purchased from banks, coin dealers, regal assets, precious metal firms and jewelry from jewelry shops. The karat amounts in coins and jewelry, affects the price and durability of each piece.