Gold is an investment and insurance keeping its value against the test of time. With that said, gold can go up and down in price compared to the US dollar, but over time it’s a proven and safe investment. Making fast profits with gold is a risky business, but if you’re in for the long run, your risks are much lower.
Why Should I Invest in Gold?
Gold has always been a controversial investment, because of it’s horrible past. Many gold-seekers have died or lost everything during their search for gold. The past is no longer here, but gold is still here, and like it or not, but it’s still a stable asset to have.
There are many stories involving gold. Some people say that the monetary system is a fraud, and gold is the only safe payment system. But the truth is somewhere in-between, and cash has its place. Investing in gold is a great way to diversify your investment portfolio. You can balance the risk against stocks and funds by adding gold.
Physical Gold or Gold ETFs?
Investing in gold ETFs is straightforward. Many online stockbrokers offer investments in ETFs and Mutual funds. The cost and minimum investments required are low. You can become a gold investor for under 50 dollars.
Having physical gold gives you total control, it’s an insurance against inflation, and you can give it to anyone without fees and taxes. But it’s harder to sell, and gold brokers have prices that lower your profit. If you have a lot of gold, storage and insurance costs can be quite expensive.
Gold Mining Companies – A Safe Investment?
You can buy stocks in gold mining companies. That is an indirect gold investment, and you could get both profits from a rising gold price, speculations, and when a company finds new gold deposits. But the price can go down, and a mine can get depleted. No investment is safe, even if the risks are low.
But gold mining companies can still show profits even if the gold price is going down if you invest in a global gold company, the possibilities that they find new deposits regularly is quite high. When a new mine is opening, the stock will probably go up.
What is Gold Bullion?
Gold bullion is almost pure gold. You could own both bars and coins, and it still a gold bullion piece. If you want to buy this kind of gold, it’s better to invest in coins. If you’re going to sell your gold, a big bar could be hard to sell, or you have to divide it into smaller pieces.
Pure gold is worth a lot and pretty easy to store at home. The significant risk comes when you talk about how much gold you own. Never tell anyone that you own gold and keeping it in a safe at home. Otherwise, you have to store it at a remote location, and then you lose direct control.
Is it Better to Buy Gold Jewelry?
Maybe if you get your gold at local pawn shops or local Jewelry stores, and only for the current gold price or lower. New gold jewelry is expensive and often cost three or four times more than the gold price itself. Buying golden earrings is not a good investment.
You have probably heard about companies buying gold jewelry for cash. It’s a great business for them and a terrible deal for a private seller. Don’t sell your gold cheap, melt it down instead, and keep the gold bars as an investment.
Investing in Gold – High Risk or Low Risk?
Example: Gold is more than just an investment. You can buy a car today for 500 grams of gold worth $23600, or keep it and wait five years. The cost is still 500 grams of gold after five years, and if the inflation is 2% per year, the car is going to cost $26000. Your gold is now worth $2400 more without doing anything.
Historically gold is a low-risk investment. The gold supply is limited, which means it keeps its value over time. Many things can happen, but if times are stable without too much distress and political unrest, gold is the best way to secure your money against inflation.
Gold in Comparison with Other Commodities
Compare to other commodities such as copper and silver. Gold is not used so much in the industries. The price is going up and down more regularly, and the demand varies significantly for copper and silver, while gold keeps its value and is a more stable investment.
You can invest in many different commodities. But you should educate yourself if you want to become a trader. Gold is easy to invest in, and you don’t need much knowledge in comparison to other assets.
What Affects the Gold Price?
When central banks are printing money, the gold price will not lose its value compare to cash but will instead go up in price. The demand for gold is also increasing, which affects the gold price a lot. It’s not easy to find new gold mines, and with less gold on the market, the price will rise.
Conflicts and war are destroying the value of money, but if you have gold, you will not lose so much. The gold value will change over time, but if they don’t find a massive deposit on the moon, the demand for gold will automatically increase the price.
Where to Buy Gold?
If you want to invest in physical gold, goldsilver.com or JM Bullion are two marketplaces with both coins and bars available for purchase. Don’t buy large quantities at the same time, purchase small amounts each time. Many things can go wrong with the delivery, and you don’t want to lose all gold or pay expensive insurances.
If you want to trade gold ETFs, plus500 is a world-wide trading platform with great features. Never invest everything you have in gold, let gold be a part of your investment portfolio and spread the risk on many different investment types.