Gold is viewed as a stable investment, so in times of economic difficulty, it appears to be an attractive place to put money. However, investing in gold is not for everyone. Read on to learn how to invest in gold.
Disclaimer
The content in this page is not a substitute for professional financial advice. Please contact your financial adviser before using the information presented here.
Gold is viewed as a stable investment, so in times of economic difficulty, it appears to be an attractive place to put money. However, investing in gold is not for everyone. Read on to learn how to invest in gold.
Disclaimer
The content in this page is not a substitute for professional financial advice. Please contact your financial adviser before using the information presented here.
Introduction
- Gold has been valued as an investment since it was first mined thousands of years ago. Whether you are looking to hold it for the long term or make a fortune trading in gold, you first need to understand whether its the right investment for you, and then examine the choices you have to enter the market.
Step 1: Should You Invest?
- While gold may seem to be an attractive, stable, investment it may not be the best choice for you. Here are some facts about gold as an investment.
- Gold generally performs well while the dollar is declining.
- It is a limited natural resource and this built in scarcity helps it to retain value.
- Investments in gold perform better than stocks in times of global political instability.
- Gold prices are volatile.
- During bull markets, gold prices tend to decrease as investors switch to stocks.
- Gold does not pay dividends.
Step 2: How to Invest
Panning for Gold is passé(Creative Commons photo by Zheng Xu)- There are several different ways you can invest in gold:
- Physical gold
- If you have a secure location to store the gold, you can purchase bullion coins or bars from the U.S. Mint (coins only) or private companies.
- Collectible coins and jewelery give pleasure, and may have value beyond the amount of gold they contain.
- Exchange Traded Funds
- With exchange traded funds, or ETFs, you purchase shares in a fund which holds gold.
- The shares are traded on the stock market.
- ETFs represent a very liquid way to hold gold, as you can buy and sell them just as you would any stock or mutual fund.
- Gold Futures
- If you have a high tolerance for risk, and a strong view on where gold prices are headed, you can buy and sell gold futures.
- Futures can be purchased through most stock brokers.
- Gold Mutual Funds
- Gold mutual funds blend ETFs, futures, bullion, and other investments to create a more balanced conservative investment.
- Individual funds have different track records, so investigate them as you would any mutual fund.
Conclusion
Regardless of how you choose to invest in gold, its important to review your investment strategies periodically to ensure that gold still fits your investment goals and objectives.
