The Basics Of How To Invest In Gold

The Basics Of How To Invest In Gold

The Basics Of How To Invest In Gold

Gold - a historically coveted form of wealth. Popular culture has saturated our imagination with images of gold coins seemingly bursting out of an old, decaying pirate chest. Rows and rows of gold bars lay dormant in underground vaults in places like Fort Knox, twinkling, almost teasing, behind countless security measures. But realistically, how is gold purchased in today's world? What can the average investor expect when they are first getting their feet wet in expanding their portfolio to include investments in gold? The three main ways to invest in gold are purchasing gold coins, putting money in exchange-traded funds that buy the metal for you, or investing in gold mutual-funds or stocks of mining companies themselves.

The most direct way to physically own investment grade gold is to purchase one or several types of gold bullion coins; namely American Gold Eagles, Canadian Maple Leaf Coins, or South African Krugerrands. Guaranteed by their respective governments, these coins are widely traded and can be purchased via websites such as Tulving, Gold Masters USA and Monex Precious Metals. One of the major downsides, however, is the risks associated with actually storing the gold yourself. A fireproof, secure safety deposit box should be the absolute minimum when it comes to safe guarding your investment.

Buying shares in gold mines themselves, gold mutual funds, and Exchange Traded Funds alleviate the burden of physically storing the gold as well as the inevitable surcharge and markup associated with buying the actual metal from a third party company. Of course, your investment is now not in the actual metal itself, but in the company mining it or a fund. This means your holdings could be in flux even if the price of gold remains steady, but there is also a tremendous potential upside. For example if a particular mine expands its operations, the value of your holding could expand at a far greater rate than the value of gold. Most precious metal firms require an initial investment of $1,000 to $2,500, and have given a greater return over the course of a decade that investing in gold directly.

Purchasing gold directly, investing in a precious metal mural fund, or putting your money in a mining company directly are a few of the many ways to expand your portfolio to include gold, which is historically one of the best performing investments.

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