Investing in Gold 101

Gold has withstood the passing of time and has maintained its value since the dawn of civilization. Because of it’s worth, gold isn’t just appealing to investors who want to diversify their portfolio, but also to those who want to preserve their wealth for emergencies or simply save money for later use. Investing in gold is a more stable option, and even though gold prices vary, it’s still not as nearly as volatile as stocks or bonds.

Moreover, gold is more liquid than other stable investments, such as properties, meaning it’s quite easier to sell gold when a need arises, than it is to sell a house. In addition, investing in gold serves a purpose of financial insurance against inflation and global economic crisis. That means that once you start investing in gold, you should never trade it. Instead, save it for “rainy days” or as a means to pass on your wealth to future generations. Here are a few tips for investing in gold.

Why Is Gold Such a Good Investment?

Gold is one of the most valuable precious metals on earth. Aside from its historical value, gold is used for various industrial purposes. For instance, gold is primarily used for crafting jewelry, which represents a person’s status in today’s society. Moreover, gold is a great electricity conductor, it doesn’t tarnish or corrode and is soft enough to be crafted into various shapes, ranging from wires to thin metal sheets.

Because of its special properties, gold is used in manufacturing of electronics, such as cell phones and computers. In addition, gold has traditional value in different cultures. Also, in times of economic turmoil, when stocks, bonds and real estate start to decline, gold prices increase because people look for gold to insure their investment. Put simply, gold will always be highly sought after and it will maintain its value, which is why gold is such a good investment.

Define Your Investment Goals

Deciding to invest in gold should never be done on a whim. Instead, you should carefully consider your options and define goals for your investments. For instance, do you need gold to preserve wealth, build wealth or simply to diversify your portfolio and ensure additional earnings? Meaning, do you want to ensure that your assets are safe from inflation or do you want to have assets ready for an event in the future.

Furthermore, you have to decide on whether you need a short-term, medium-term or a long-term investment. As an example, short-term investments are less volatile and allow you to have access to funds when needed during short periods of time. On the other hand, long-term investments involve more risks, but they can also bring you bigger rewards. That way, you can identify which type of gold investment, such as gold ETFs (Exchange Trading Funds), gold mining stocks or physical gold, will suit you best.

Invest in Physical Gold

If you’re a beginner in gold investment, the best option for you is to buy gold in its physical form. Gold can be obtained in form of rounds, bars and coins. Furthermore, the most popular and easy to trade option is to acquire gold in the form of coins, valuable gold bullion coins to be exact. The main reason is that gold bullions are the most suited form of investment. They are high-grade gold coins of at least 90% purity.

Moreover, they are mostly issued by government agencies and authorized private organizations, so you don’t have to worry about their authenticity. Gold bullions can be of different weight ranging from 1/10 oz to 1 kg, with 1 oz bullions being the most commonly used ones. What’s more, gold coins provide a hedge against financial crisis and can even offer a return on investment if your timing is right.

Avoid Rare Coins

If you’re a gold investment beginner, you should avoid investing in rare coins. They require delicacy and expertise to become a good investment. If you lack the vast knowledge needed to evaluate and identify rare coins, you may lose your investment entirely. This is especially true if you spend your investment on rare coins that turn out to be fake.

In addition, rare coins have to be graded properly, in order to determine their value based on rarity, quality, historical importance, amount, collector demand and other factors. In addition, rare coins still have value based on the amount of precious metals they contain, but other figures also determine their true market price.

Investing in gold is always a good opportunity to preserve your wealth and ensure that your assets are secured. However, there are a lot of factors to consider before you start investing. That way, you’ll know whether you want your gold to be a security investment or a long-term opportunity.