There are plenty of reasons to invest in gold or add it to your portfolio. There are also myriad options for doing so.
Stocks, bonds, certificates, futures, and exchange-traded phones all offer various opportunities and benefits at different investment levels. But one of the most worthwhile investments might be in actual physical gold.
Physical gold is a promising investment strategy that works well for investors of any level. Here are some of our top tips for investing in gold.
Keep in mind we are not financial advisors, so this is not intended as financial advice. Please consult your own financial advisor before making any investment decisions. Check it out below.
Why Gold Investment is Worthwhile
In the wide, wonderful world of investing, gold is one of those precious metals that some people tend to really love while others tend to eschew. There are two reasons people tend to invest in gold for the most part.
One of them is that gold is a valuable inflation hedge, meaning that it will typically retain its value during the economic downturn. The other is that it maintains long-term value.
Other considerations, such as diversifying a portfolio, reacting to supply and demand, geopolitical uncertainty, and protection against deflation are all sound reasons for investing in the precious metal.
Buy Gold Bars and Coins
Coins, jewelry, and gold bars (or bullion) are the most common ways people own and invest in gold. Each had its own benefits and drawbacks. Jewelry is fairly easy to get but must have a high carat value for it to really be a viable investment.
It’s also quite susceptible to theft. Both coins and bars are tangible objects you can hold in your hand and store in a safe. They are fairly easy to acquire and sell, though their liquidity can vary. One of the best ways to get into physical gold investments is through buying a pure 5 gram gold bar.
They’re relatively inexpensive, have a low bar to entry, are easy to sell, and are not only authentic but also quite elegant in their design.
Consider Not Buying On Credit
While you can definitely use a credit card to purchase physical gold, it’s not always the best idea. Using credit for something that’s going to be an investment isn’t always a sound strategy.
Sure, it may offer a convenient and accessible way to purchase gold — especially since credit cards can have pretty high limits and clear quite fast.
But credit cards are also subject to paying interest, so if you’re not paying off that balance quickly you’re paying more for the gold over time than you would if you just paid cash for it. Credit cards can also be a secure payment method.
That’s all well and good, but aside from the interest concerns, there are also fees involved with using credit cards. The higher the purchase, the higher the fees climb. This also extends to higher APR as well if the balance doesn’t get paid off quickly.
There’s also the simple fact that many gold sellers won’t even accept credit cards these days due to the prevalence of fraud within the trade. Your mileage may vary, but consider using non-credit financial resources when investing in gold for your portfolio.
Store Gold In A Secure Location
Storing your precious gold investment is perhaps the most critical aspect of owning it in physical form.
Remember that physical gold is susceptible to theft, but not damage from corrosion. Storing it is also largely determined by where you live and what kind of access you have to storage facilities. Living in an apartment or small house might not make it viable to store something in a large vault in your basement.
However, you could find another means of safeguarding your gold investment. You could store it in a saltwater tank if you wanted to (but you probably shouldn’t). Still, storage considerations are pretty important for any precious metal. You might store it at your safe deposit box at a trusted bank, find a reputable depository/vault, or even buy a safe to store it at home.
Some people like to hide it in places they feel are secure around their home, but it’s best for us to bury it in the backyard. That’s an almost certain way to lose your valuable coins, jewelry, or bars.
Consider Investing in Other Precious Metals Too
For almost as long as people have been saving and investing in gold, they’ve been doing so with other precious metals too. Silver, for instance, is a fine metal that’s used in a lot of jewelry and other items. It also acts as an inflation hedge similar to gold, but with fewer gains over time.
Copper is another valuable metal that’s used in a lot of different things like wires, piping, kitchen utensils, and industrial applications. Platinum and palladium are some of the rarest precious metals around that largely find use in electronics and automotive applications.
Each of these has a lot of intrinsic value when it comes to investment. There are plenty of questions to ask before investing in other precious metals.
These might include finding out if they’re allocated or unallocated metals, determining how you’re going to invest in them, and considering storage/delivery/ongoing maintenance costs. They are worth looking into for diversifying a portfolio and adding them to your gold investments for the future.